Often we think about innovation as going after new unchartered territories, but it is also important to innovate in those existing dimensions that will remain important for customers. For Amazon retail, some of those dimensions are low pricing, large catalog, fast shipping, and convenience. Every effort we put into improving these drives a flywheel that yields benefits both immediately and for the long-term. For example, when our retail customers contributed to create larger economies of scale for Amazon.com, we used the savings to lower pricing such that our customers could also benefit.

In Amazon Web Services there are similar dimensions that are forever important to our customers; scale, reliability, security, performance, ease of use, and of course pricing. Any work we can do to improve over these dimensions generates long term benefits for AWS customers. AWS also applies the same customer oriented pricing strategy: as the AWS platform grows, our scale enables us to operate more efficiently, and we choose to pass the benefits back to customers in the form of cost savings.

Often customers are surprised about our strategy to help them drive their costs down. Our account managers periodically call customers to work with them to see if there are opportunities to create better efficiencies and lower bills. Our solution architects work with customers to look for opportunities to exploit elasticity in AWS setups which can lead to significant savings in operational cost. According to our customers, this is unique in the industry.

Today marks another important milestone in our continuous cost reduction strategy; we've lowered prices over a dozen times in the past four years, and today we're lowering them again. Bandwidth pricing will see a reduction that for many customers can easily lead to a 40% or 50% savings in bandwidth costs. Incoming bandwidth cost will drop to $0.00 in every region. And, in the US and Europe every outgoing tier will see price reductions. We are also adding new tiers to pass saving onto our very large bandwidth consumers.

For more details see the announcement, the details pages of the services at http://aws.amazon.com, and the posting on the AWS developer blog.