Rackspace Takes Aim at Amazon, Slashing Cloud Storage Costs by 30%


Rackspace has just stepped up the pressure on Amazon Web Services by slashing its cloud storage rates by a whopping 33 percent last Friday, while announcing plans to roll out tiered pricing for its open cloud services.

The cuts will see the cost of Rackspace’s Content Delivery Network, which routes traffic around the web to reduce latency and page load times, slashed by 30 percent, down to $0.12 per GB from its previous price of $0.18. This newly reduced rate matches the per-GB pricing of Amazon’s CloudFront CDN for the first 10 TB per month of out-bound data transfer. After that, CloudFront’s prices are reduced, although Amazon does not publicize its reserved pricing for the service.

In an interview this morning on NewsDesk, Wikibon’s Chief Analyst Dave Vellante explains that Rackspace initiated the OpenStack initiative as a “hail-mary” against Amazon, but since its launch things have really started to take shape.

“I think this is definitely aimed at going after Amazon, particularly in two areas where Amazon is often criticized… first the complexity of Amazon’s pricing, and second its bandwidth costs. Rackspace is really trying to turn the crank on one of Amazon’s Achilles heels,” explains Vellante.

In addition to its CDN discounts, Rackspace has announced a new tiered price structure applicable to its Cloud Files Object storage service. The company will offer volume discounts starting at $0.10 per GB a month for 1TB, down to just $0.75 per GB for 524 TB a month. Rackspace offers even greater discounts, but doesn’t publish its prices beyond this amount of storage.

Rackspace storage pricing

Amazon’s storage prices remain slightly lower (see the chart below), but as Rackspace quite reasonably points out, Amazon also charges additional fees for PUT, POST, HEAD, GET, LIST and DELETE requests, while the former does so free of charge.

Amazon storage pricing

Rackspace is of course undergoing a radical transformation into a serious public cloud contender from its origins as a dedicated hosting provider. It’s investing $$$$’s into its cloud services just as Amazon is, but its service differs in that it relies on the open-source OpenStack controller and the KVM hypervisor. Meanwhile, Amazon uses a closed-source variety of the Xen hypervisor alongside its own, internally-developed cloud controller that will almost certainly never become open-source.

Rackspace’s aggressive move to compete with Amazon in the pricing stakes shows that the company is committed to taking on the cloudspace’s biggest player. Until recently, Rackspace has seemed reluctant to fight on pricing, instead relying on the rock-solid support of its core users to justify its increased cost.

Here with more analysis is Dave Vellante on NewsDesk: