Amazon’s S3 data storage service sent an email to its users last night about pricing changes (which actually decreases for most users)…

Dear Amazon S3 Developers,

This is a note to inform you about some changes we’re making to our pricing, effective June 1, 2007.

With Amazon S3 recently celebrating its one year birthday, we took an in-depth look at how developers were using the service, and explored whether there were opportunities to further lower costs for our customers. The primary area our customers had asked us to investigate was whether we could charge less for bandwidth.

There are two primary costs associated with uploading and downloading files: the cost of the bandwidth itself, and the fixed cost of processing a request. Consistent with our cost-following pricing philosophy, we determined that the best solution for our customers, overall, is to equitably charge for the resources being used - and therefore disaggregate request costs from bandwidth costs.

Making this change will allow us to offer lower bandwidth rates for all of our customers. In addition, we’re implementing volume pricing for bandwidth, so that as our customers’ businesses grow and help us achieve further economies of scale, they benefit by receiving even lower bandwidth rates. Finally, this means that we will be introducing a small request-based charge for each time a request is made to the service. Below are the details of the new pricing plan (also available on the Amazon S3 detail page):

Current bandwidth price (through May 31, 2007)
$0.20 / GB - uploaded
$0.20 / GB - downloaded

New bandwidth price (effective June 1, 2007)
$0.10 per GB - all data uploaded

$0.18 per GB - first 10 TB / month data downloaded
$0.16 per GB - next 40 TB / month data downloaded
$0.13 per GB - data downloaded / month over 50 TB
Data transferred between Amazon S3 and Amazon EC2 will remain free of charge

New request-based price (effective June 1, 2007)
$0.01 per 1,000 PUT or LIST requests
$0.01 per 10,000 GET and all other requests*
* No charge for delete requests

Storage will continue to be charged at $0.15 / GB-month used.

The end result is an overall price reduction for the vast majority of our customers. If this new pricing had been applied to customers’ March 2007 usage, 75% of Amazon S3 customers would have seen their bill decrease, while an additional 11% would have seen an increase of less than 10%. Only 14% of customers would have experienced an increase of greater than 10%.

We don’t anticipate making further structural changes to Amazon S3 pricing in the future, but we will continue to look for ways to drive down costs and pass the savings on to you.

Sincerely,
The Amazon Web Services Team

Storing data, and providing access to that stored data through various calls, is getting cheaper and cheaper for companies such as Amazon.  The relatively low price that you pay for data storage on a platform such as S3 (compared to relatively expensive alternatives like Box.net or OmniDrive) show that it’s the companies such as Amazon that will eventually win out in this space.

But why would you want to win in the data storage space?  And where’s Google’s long rumored “GDrive / Platypus” if this is someplace you want to be?

I think the answer to both of those has to do with the respective paths which Amazon and Google are taking to secure their futures and long term revenue.  Google is storing data, but it is attention and behavior data such as where people go, what they click, what ads work where, and how they navigate the web.  This sort of passive data acquisition works well for a company that doesn’t produce a commodity or an interface for building a relationship of trust (outside of providing information through a search… but even there users are beginning to realize limitations).

Amazon, on the other hand, is practicing what I consider active data acquisition by offering tangibles such as products and storage (and perhaps music soon?), which allows for a relationship of trust.  I have numerous credit cards on file with Amazon and I have no problem storing gigs of data on their S3 service.  Even though I have used and still use services such as GMail, I along with many users, are beginning to become conscious of the type of data that Google collects.

So, I think this is a question of perceived trust.  Soon, Amazon will continue to lower its prices of data storage and will (I think) eventually be paying users to host their data on S3.  This will be a sea change and cause a rippling effect in how we consider our attention and the data that we generate, both in terms of files and cookies, and who is using them and how.