According to 451 Research’s latest Cloud Price Index (CPI), the cloud services sector is a long way from being a commodity market. Price, the CPI indicates, barely affects market share, while value-added services comprise the real driver in the sector.
Amazon Web Services (AWS) and Google have been cutting virtual machine (VM) prices relentlessly for a while now, spurring some to refer to this tactic as a “race to the bottom.” And although 451 Research finds that VM pricing has dropped 12 percent on average over the past 18 months, it conversely found that the price of storage, load balancing, bandwidth, and other services has remained stable and continues to provide margins.
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