http://live.pirillo.com/ – Most people don’t realize that Amazon has been a pioneer in the web services frontier: they have services which developers can interact with to help develop applications.

S3 – the Simple Storage Service – is an expandable storage service which allows other websites to offload their storage needs to S3. So, websites can store images, videos, and other files which cost a large amount of money to store and transmit this data.

EC2 – the Elastic Computing Cloud – allows websites to offload computing needs, rather than storage needs. So, if your website gets posted to Digg, the spike in traffic can be accommodated, rather than slowing to a crawl due to a lack of computing power.

While both S3 and EC2 provide different features to developers, they offer the same basic service: being able to augment costly services (bandwidth, storage, and computing cycles) at a "pay as you need it" rate.

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This is a note to inform you about some changes we’re making to our pricing, effective June 1, 2007.

With Amazon S3 recently celebrating its one year birthday, we took an in-depth look at how developers were using the service, and explored whether there were opportunities to further lower costs for our customers. The primary area our customers had asked us to investigate was whether we could charge less for bandwidth.

There are two primary costs associated with uploading and downloading files: the cost of the bandwidth itself, and the fixed cost of processing a request. Consistent with our cost-following pricing philosophy, we determined that the best solution for our customers, overall, is to equitably charge for the resources being used – and therefore disaggregate request costs from bandwidth costs.

Making this change will allow us to offer lower bandwidth rates for all of our customers. In addition, we’re implementing volume pricing for bandwidth, so that as our customers’ businesses grow and help us achieve further economies of scale, they benefit by receiving even lower bandwidth rates. Finally, this means that we will be introducing a small request-based charge for each time a request is made to the service. Below are the details of the new pricing plan (also available on the Amazon S3 detail page):

Current bandwidth price (through May 31, 2007)
$0.20 / GB – uploaded
$0.20 / GB – downloaded

New bandwidth price (effective June 1, 2007)
$0.10 per GB – all data uploaded
$0.18 per GB – first 10 TB / month data downloaded
$0.16 per GB – next 40 TB / month data downloaded
$0.13 per GB – data downloaded / month over 50 TB

Data transferred between Amazon S3 and Amazon EC2 will remain free of charge

New request-based price (effective June 1, 2007)
$0.01 per 1,000 PUT or LIST requests
$0.01 per 10,000 GET and all other requests*
* No charge for delete requests

Storage will continue to be charged at $0.15 / GB-month used.

The end result is an overall price reduction for the vast majority of our customers. If this new pricing had been applied to customers’ March 2007 usage, 75% of Amazon S3 customers would have seen their bill decrease, while an additional 11% would have seen an increase of less than 10%. Only 14% of customers would have experienced an increase of greater than 10%.

We don’t anticipate making further structural changes to Amazon S3 pricing in the future, but we will continue to look for ways to drive down costs and pass the savings on to you.

P.S. Please note that the reduced bandwidth rates shown above will also take effect for Amazon EC2 and Amazon SQS. The bandwidth tier in which you will be charged each month will be calculated based on your use of each of these services separately, and could therefore vary across services.