ProfitBricks Cuts IaaS Prices, Claims Pricing Leadership

ProfitBricks has slashed the price of infrastructure-as-a-service (IaaS) offerings and is claiming that it is winning the cloud price wars against its biggest competitor Amazon Web Services (AWS).

For this volley in the cloud price wars, ProfitBricks has reduced its prices by 30 percent and “has doubled the price drop percentage of the industry leader in the last year,” according to the vendor. With this price cut, a cloud instance with two dedicated CPU cores, 7.5GB of RAM and 500GB of block storage is now $73.95 per month. That includes support.

It’s the first big price cut from ProfitBricks in a year, when it challenged Amazon with a major price cut and claimed its pricing was 50 percent of its rival’s. At the same time as it’s competing on price, ProfitBricks is also competing on price/performance, which it stated is better than what customers are getting at Amazon.

“Customers should have fundamental control and flexibility over their cloud experience, and not have to worry about being gouged on price,” said Andreas Gauger, co-founder of ProfitBricks, in a prepared statement. “With our approach, customers can tailor their service to meet their exact requirements, and avoid over- or under-buying of cloud infrastructure. It’s an ‘unbound’ philosophy that we feel delivers on the true promise the cloud was intended to be. We kicked off the current price war with a 50 percent drop in July 2013 and we are now seeing the largest players in the industry resort to the old, tired pricing, packaging and lock-in schemes of yesterday’s enterprise IT.”

Some tough talk from ProfitBricks. But the company is fighting to differentiate itself in a market that is being dominated by a handful of major players, including Amazon and Microsoft Azure (MSFT). And as the market continues to evolve, smaller players may find it even more difficult to compete. Many are likely to fall by the wayside, while others could be gobbled up by their larger competitors.

ProfitBricks is aiming to differentiate now and position itself as an alternative to the likes of Amazon.