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2nd Watch Survey Shows Cloud Price Wars Will Result in Higher Spending

Despite Recent Reductions in the Cost of Capacity, Many IT Directors Said They're Planning to Spend More on Cloud Infrastructure This Year Over 2013, and More Than 70% Said They'll Move More Applications to the Cloud and Do Additional "Experimentation" Gi

SEATTLE, WA -- (Marketwired) -- 05/01/14 -- 2nd Watch surveyed more than 100 IT directors from large and mid-market companies, to understand the impact of recent cloud infrastructure price reductions on their businesses. According to results of the online survey, conducted over a two-week period beginning in mid April, price cuts are driving increased investment and innovation in cloud-based projects. However, despite ongoing price competitiveness among cloud infrastructure providers, a majority (62%) of survey respondents said features and performance were more important than price in deciding which vendor to engage.

The cost of adding cloud infrastructure continues to go down, a trend that is likely to continue. Amazon has cut prices across its cloud offerings by about 34% since October, while Google reduced prices by about 23% in March and 19% in December. Microsoft lowered prices on its cloud service by 32% over the last four months. Cloud infrastructure is an increasingly competitive market driven mainly by the cost, flexibility, security and convenience benefits of being able to "spin up" new cloud instances on a moment's notice.

2nd Watch is a fast-growing player in the enterprise cloud services marketplace. Since 2010 the firm has migrated hundreds of large and mid-market companies to Amazon Web Services. In Q1 2014 alone, 2nd Watch added a half dozen Fortune 500 companies to its client portfolio and increased bookings 400% over Q1 2013.

A majority (80%) of IT directors responding to the 2nd Watch survey reported they were aware of the major price reductions occurring in the cloud infrastructure market, and better than 60% said Amazon offered the best price. Amazon was also cited by a majority of respondents (70%) as having the best price to value, followed by Google (8%) and Microsoft (4%).

Other notable findings from the 2nd Watch Cloud Infrastructure Price Wars survey:

  • 60% of IT directors spent at least $10,000 last year on cloud infrastructure and nearly a quarter spent more than $100,000
  • Almost one quarter of respondents said they'd spend up to 25% more this year on cloud infrastructure while 20% said they'd spend 25-50% more on cloud infrastructure
  • 37% of companies will move more applications to the cloud this year than last year and 35% will do more experimentation with cloud projects
  • 41% of respondents said they monitor cloud pricing changes "all the time," while 42% said they look at their cloud infrastructure bills "occasionally"
  • Nearly 42% of respondents said their cloud infrastructure bill fluctuates 10-20% monthly
  • Companies spent the most on cloud infrastructure between October and December last year (nearly 35%), with the next busiest time reported as January to March (23%)

"The latest pricing changes from Amazon, Microsoft and Google are moving the cloud infrastructure market in a positive direction," said Kris Bliesner, CEO at 2nd Watch. "Cloud infrastructure continues to deliver huge economic and scalability benefits. When was the last time your IT Infrastructure costs decreased after you installed it? With the Cloud this happens all the time and businesses benefit everyday from price cuts. We think 2014 will be an exciting time of innovation and adoption of cloud computing by businesses of all sizes."

About 2nd Watch
2nd Watch is a global leader in building, deploying and managing Amazon Web Services (AWS) based IT operations for enterprise customers. 2nd Watch assists customers in evaluating the economics of moving IT operations into AWS, designs and builds highly reliable and scalable AWS based enterprise IT platforms, and provides software tools and management services that enable enterprises to deploy, manage and optimize cloud based IT operations infrastructure. 2nd Watch has effectively moved over 2MW of enterprise data center capacity into the AWS cloud as part of 300+ platform and data center migrations. 2nd Watch is an AWS Premier Consulting Partner and is headquartered in Liberty Lake, WA with offices in Seattle, San Francisco, and New York. For more information, try the TCO Calculator at tco.2ndwatch.com, email [email protected], visit www.2ndwatch.com or call 1-888-317-7920.

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