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This may be good news for startups like SmagMug, MediaSilo and SlideShare who use the Amazon Simple Storage service for hosting content. Amazon has reduced the storage prices for S3 service though the cut will no effect on small customers who manage only a few gigabytes of data.

Amazon currently charges 15˘ per GB of storage per month but this pricing structure will change starting next month.

Effective November 1, companies will continue to pay 15˘ per GB per month but that’s only for the first 50 terabytes of data. You then pay 14˘ for the next 50 TB, 13˘ for the next 400 TB but if you’re even bigger, you pay a flat rate of 12˘ per GB per month.

That means if you are SmugMug, a Flickr like photo sharing company that stores ~400 TB of data on Amazon S3, the cost savings could be substantial (>10%)

Current Amazon S3 bill (per month): 0.15*400*1000 = $60,000

Expected S3 Bill (from Nov): (0.15*50 + 0.14*50 + 0.13*300)*1000 = $53,500

I use Amazon S3 to store all the CSS files, external scripts and template images of this blog and the site performance has improved since then because outsourcing to S3 puts less load on the Apache server of my dreamhost.