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Oracle's Price Increase to Erode Amazon's Positioning

Posted by PriceBeam on March 24, 2017

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In January, Oracle doubled the cost of running its software on Amazon's AWS cloud system overnight. While the change was subtly implemented, it is likely to have a significant effect on Amazon's price positioning
With its AWS software, Amazon is aiming to be the cost leader in the cloud computing market, and thus, by doubling the price for all customers deploying Oracle Databases on AWS, Amazon's brand and pricing become inconsistent to these customers. Also, this move will most likely increase short-term revenues as customers will pay up in the beginning.

Moreover, Oracle did not increase prices for its own cloud services, and so, running an Oracle Database using an Oracle Cloud Service all of a sudden looks very cheap compared to AWS. This shakes up Amazon's growth strategy quite a bit, although, it will only be a matter of time before customers start adapting to this new pricing and either use Oracle Databases on the Oracle platform, or switch to an alternative database system on AWS.

Read more: https://www.forbes.com/sites/danwoods/2017/03/23/does-oracles-aws-pricing-increase-make-strategic-sense/2/#248de8985888

Written by PriceBeam

PriceBeam
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