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Amazon to shake data warehouse market with low-cost Redshift service

28 Nov 2012
amazon webservices reception

LAS VEGAS: Amazon Web Services (AWS) has kicked off its first-ever ReInvent customer conference by announcing a move into the data warehousing market.

The company said that its Redshift service will allow firms to dramatically cut the cost of building and maintaining a data warehouse. The platform is currently in its testing phase and is set to go live in early 2013.

Speaking before some 6,000 attendees at event's opening keynote, AWS senior vice president Andy Jassy said that in Amazon's own internal tests, the company was able to shift its retail operation from a massive multi-million dollar data warehouse to a pair of Redshift cluster units which costs the company just $32,000 per year.

When it launches, the company will price the service at $0.85 per TB per hour on demand and $0.23 per TB per hour with a three-year contract.

Additionally, the company will be cutting the price of its S3 storage platform by 25 percent. The cut will lead to a lower minimum pricing of the service, allowing customer to store data on the service at a rate of $0.095 cents per GB monthly.

Jassy said that the company had been able to expand its capacity, leading to a lower overall cost of storage which it would be passing on to customers. The AWS boss said that the cut was part of a larger trend in which the growing customer demand drives Amazon to become more efficient with its own infrastructure, creating a "virtuous cycle" which results in lower costs.

"As we are able to continue to innovate on our infrastructure, we are able to get better economies of scale which lets us lower our infrastructure costs and lower prices," Jassy said.

"It is a very good virtuous cycle for customers and AWS."

Jassy also took time out of his keynote to take a potshot at private cloud vendors, who he accused of being stuck in the past. He said that companies such as IBM, Oracle and HP have been engaging in 'cloud washing' efforts to repackage their old on-premise hardware as private cloud solutions.

The AWS head suggested that hardware vendors were stuck in a business model which focuses on maximising profit margins, while Amazon's history as a service provider has developed a low-margin, high-volume model better suited to serve customers in the cloud market.

"We like those business models, we are very comfortable running them," Jassy said.

"Most of the old guard technology companies don't like those types of business models and that is why they are pushing the private cloud so hard."

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Shaun Nichols

Shaun Nichols is the US correspondent for He has been with the company since 2006, originally joining as a news intern at the site's San Francisco offices.

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