The much publicized race to the bottom in cloud pricing started with Google, Microsoft and Amazon all slashing their prices for virtual machines, storage and bandwidth. In some instances, these prices reductions saved consumers between 40% and 60% on their cloud bills. Cloud provider CenturyLink looks to become competitive with these cloud services by following suit by instituting big pricing cuts all across the board on their cloud services. CenturyLink announced their cloud pricing cuts on their blog which notes that a virtual server at CenturyLink will cost nearly 60% less than it previously did.
CenturyLink has several strategic advantages for public cloud hosting versus services such as Google, Amazon and Microsoft. CenturyLink has 56 datacenters located all across the globe. Not all of these are cloud datacenters but the flexibility that CenturyLink can provide to corporate clients gives CenturyLink an advantage that the likes of Amazon, Google and Microsoft do not currently provide. CenturyLink is also known for its aggressive development of new cloud services. Since CenturyLink has acquired large telecommunications firms such as Savvis and Quest, CenturyLink has an advantage in terms of existing infrastructure.
In a blog post, CenturyLink says, “We are building a formidable machine in the cloud by uniting the innovation and market strength of CenturyLink and our global network with key acquisitions we’ve made, including Savvis, Tier 3, AppFog, Ciber’s ITO business and Qwest’s legacy hosting. This momentum will continue. The goal is to win in hybrid solutions, to take advantage of our unique position to enable global enterprises as they transform to ‘IT as a Service’ models. Network, colo, cloud and managed services together.”
CenturyLink has a lot of momentum going for itself. It will be interesting to see how other cloud providers that directly compete with CenturyLink respond. Several weeks ago, CloudWedge reported on RackSpace’s reluctance to enter into the cloud pricing war, mentioning that they strive to be a premium outfit. Will cloud providers such as RackSpace change their mind now that CenturyLink has slashed prices? Only time will tell.