CenturyLink Aims to Compete with Amazon on Price

Cloud computing prices for infrastructure-as-a-service (IaaS) continue to plummet. Maybe it’s an exaggeration, but it sometimes seems like Amazon Web Services (AWS) is hitting new pricing lows on a weekly basis, and other IaaS providers aren’t pulling any punches, either. So can other IaaS providers compete on price when Amazon (AMZN), Google Cloud (GOOG) and Microsoft Azure (MSFT) are on a constant pricing downslide?

CenturyLink (CTL), which has competed in the market largely through its previously named Savvis brand, thinks it can. Whereas others in the space, such as Rackspace (RAX), have chosen not to play the neverending game of cloud pricing limbo (how low can you go?), CenturyLink is poised to follow suit and fight the incumbents on what has become a common battleground—the almighty dollar.

Andrew Higginbotham, senior vice president of Cloud and Technology at CenturyLink, recently told research firm GigaOM that CenturyLink can and will compete with the likes of Amazon on pricing.

It’s a brave declaration, especially considering that pricing continues to fall at a dramatic rate. One has to question how that’s going to affect margins, both for the cloud providers and for their channel partners. But as we’ve noted before on Talkin’ Cloud, it’s a reality that partners simply have to accept. Nothing is going to change, and the ongoing price war isn’t about to let up.

The public cloud computing market has become even more competitive since its inception, and there are more players entering the market—and likely even more on the horizon.

One of the most touted benefits of cloud is its ability to reduce costs for a variety of businesses and verticals, and public cloud providers are intent on continuing to drop those costs. So it’s not an easy market to compete in. And there have been casualties along the way, with various niche or specialized players finding they can’t compete against the giants or discovering their services are a little more commodity and a little less profitable.

As for CenturyLink, it’s probably one of the few IaaS providers that could compete heavily in the market on a global basis and compete directly against its larger counterparts on price. Whether that will work out for them—and how it will affect its bottom line—is anybody’s guess.