AWS has offered Red Hat Enterprise Linux since 2007. In 2010, AWS began offering a free usage tier. With today’s news, the two are combining to offer 750 hours of RHEL to the customers eligible for the free usage tier.
The news follows last night’s posting on the AWS blog that it is dropping the price on Amazon RDS (Relational Database Service) database instances, both for its “On-Demand” and “Reserved,” varieties. A reserved instance is bought in advance at a set price. An on-demand instance lets the customer pay as needed with no long-term commitment.
AWS states that its on-demand prices have been reduced as much as 18 percent for MySQL and Oracle BYOL (Bring Your Own License) and 28 percent for SQL Server BYOL. All of a customer’s on-demand usage will automatically be charged at the new and lower rates effective June 1. For reserved instances, prices have been reduced as much as 27 percent for MySQL and Oracle BYOL. The new prices apply to Reserved Instance purchases made as of today.
Here’s an interesting catch: AWS will provide the new pricing to reserved instances bought within the last 30 days. Reserved instances are normally non-refundable. This applies to one-year reserved instances purchased in the last 30 days and three-year reserved instances purchased in the last 90 days. The exchange is for a limited period of time. Customers will receive a pro-rata refund of the upfront fees paid at the time of purchase.
More for less is a common theme that AWS presents. Is it a price war? Undoubtedly. But it is also a reflection of the shift that the enterprise is going through. There is just more business. Companies don’t need to manage their own databases if they choose not to. They can turn to AWS for that. With that new volume, AWS can drop prices and still come out ahead.