I Am Competing As Well: Amazon

I am competing as well: Amazon

Well, how many of us could have imagined that one of the pioneers of cloud computing – Amazon, would have started feeling the heat of competition so early in the domain. However the fact is that Amazon has recently re-worked its marketing and pricing strategies and has started pushing aggressively on consumer sensitive price points. With the advent of numerous cloud computing providers like Google etc., it is important for the organization to stay competitive in the fast and dynamic environment of cloud computing.

Services from giants like Microsoft Azure, or Rackspace cloud computing platforms, have forced Amazon to get fierce about the pricing.

What exactly is on the card?

Amazon has always believed in bringing the benefit to consumers that commit to it for long time reservation. Therefore in the current marketing policy, it is quite evident that huge discounts and offers are being given to consumers who are willing to stick to Amazon for a longer duration. This way Amazon wants to retain the consumer base it taps. It also helps in not going for impressing the same client again and again. Therefore if for instance you choose to block a three year reservation, you would end up getting huge discounts from Amazon for your little effort.

Who is benefiting?

It is wrong to think of the target group that Amazon is focussing on. In fact, it is not focusing on any real target group. The customer base in its segment is simply being offered awesome discounts by way of coupons, price reductions, saving options, EMI option, and also quarterly balancing. For companies that come out with monthly budgets, it has those monthly pricing plans. Then there are companies that are usually large and have stuck up budgets. These are usually in the time frame of a quarter to a full year. For such companies, Amazon has decided to provide yearly balancing plans. This means that if your company is tied up with a yearly budget, you are hedged against the spikes and troughs in your usage for one full year. The balancing will be done at the end of the year. Similar there are plans available for quarterly payments as well.

Another important area or target group that Amazon is focusing on is start-ups. Various start-ups from developed as well as developing nations have chosen Amazon cloud services due to the flexible and affordable price points and options that they provide. Amazon wants to further cash in on this phenomena by providing further pricing benefits to these consumers.

Amazon is picking its sweet spots quite aggressively. One might think for an instant that a company of Amazon’s stature in this domain doesn’t need to do much for maintaining the product leadership in this category. However it is here where Amazon has out beaten its rivals by thinking out of the box, and also very aggressively. Since everyone is into a commodity service, therefore by getting aggressive on pricing Amazon has given signals that it is not sitting idle and complacent at all.

By Kaamil Nakhasi

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