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Amazon Slashing Pricing for Cloud Storage

Look for Amazon.com's deep cuts in hosted storage pricing to impact rivals.

The Seattle, Wash.-based company said in an email to customers Tuesday morning that it was cutting pricing on its highest-end tier of online storage in its Amazon S3 (Simple Storage Service) by a big amount:

While this is a huge development for users of cloud-storage, it's also noteworthy for Amazon's smaller but growing rivals in this space. Companies including Rackspace and Terremark have been building their infrastructure at a rate of about 10,000 servers per quarter to handle the massive growth in the cloud computing space, but it seems they're now doing it at a time when pricing or margins could be facing big-time pressure.

To date, other companies (especially Rackspace) have managed to see significant growth in profitability as well - - but large price drops by a company that is arguably the biggest in this segment can't exactly be viewed as positive developments for Amazon's competitors.

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