A Price War Erupts in Cloud Services - WSJ.com

Irresistible economics

"Behind the growth are big savings. A medium-sized website with about 50 million page views a month might spend about $1,200 a month to buy two computer servers, hardware to push data to the Web and other gear, according to calculations by Simon Margolis at technology-consulting firm SADA Systems. The same company might pay roughly $270 to $530 to rent equivalent computing power from Amazon, Microsoft or Google, he says.

Consultants say such savings are tempting some bigger companies to rent, rather than own, more of their computing power. Already, about 87% of technology executives say they use an outsourced computing provider for at least one task, according to a recent survey by consultant RightScale Inc. But it's rare for a large company— Netflix Inc. is the most cited example—to operate primarily this way."

A Price War Erupts in Cloud Services - WSJ.com