Whether you go with Amazon S3, Windows Azure, or Rackspace Cloud Files, the starting price for a GB of storage is $0.15 per month. The technology industry is highly competitive and cloud computing is expected to be one of the fastest growing areas in technology over the next few years. So why haven’t we seen a price war break out in cloud storage?
At $0.15 per GB per month, cloud service providers can turn a profit. But the margins are a lot a tighter than those traditionally seen in enterprise software and managed services. With all of the hardware and networking efficiencies gained over the last decade, we are finally reaching the point where the lifetime energy costs of operating a commodity server are more than the cost of the hardware itself. Unless we see a breakthrough in energy costs, don’t expect a major breakthrough in storage costs any time soon.