Amazon slashes EC2 prices up to 27 percent

Amazon has reduced pricing for Elastic Compute Cloud (EC2) reserved instances running Linux/Unix, SUSE Linux Enterprise Server, and Rat Hat Enterprise Linux, in some cases by as much as 27 percent.

Price reductions will apply to standard, second-generation standard, high-memory, and high-CPU instance families. User's eligible for the price cuts can receive discounts of up to 27 percent. The price reductions mark the 26th time that Amazon has lowered prices on its EC2 service since 2008.

Cuts will be most prevalent for high-CPU instances. Amazon said that it will cut high-CPU instances prices by over 27 percent in Europe. Across the board, users running operations in Europe should expect some of the highest levels of discounts.

Price cuts will only apply to Linux-based users. Those currently using EC2 on Windows-based systems are not eligible for the price cuts at this time.

The price drops mark another in a string of discounts by Amazon for the EC2 platform. Amazon's businesses model to reduce prices comes from its philosophy to focus on a wide user base instead of high margins.

All of Amazon's products and services focus on offering low margins to gain the highest number of converts. During a presentation last November, Amazon founder Jeff Bezos highlighted the firms push to offer products at low margins while selling at high volumes.

In an effort to keep up with Amazon's price cuts, Microsoft announced its own discounts on the Azure storage cloud last December. Microsoft lowered prices on its platform by as much as 28 percent.

Amazon's EC2 solution is a hosted cloud system used to run server deployments in the ether. The offering was launched in late 2008. EC2 is currently used by firms such as Instagram and Netflix.

The cloud solution was left in a jam last Christmas when operations went offline. On Christmas Eve, EC2 systems went down following a human error caused by an Amazon employee.