On Friday, cloud-computing company Rackspace Hosting (NYSE:RAX) announced that it is slashing prices on its cloud bandwidth and content delivery network by a third, while simultaneously implementing "tiered pricing" on its open cloud products, including storage service Cloud Files.

Bandwidth prices drop to $0.12 per gigabyte. Cloud Files, meanwhile, begin to benefit from volume discounts as follows:

  • Storage of up to 1 terabyte of data goes for $0.10 per gigabyte, per month.
  • Higher storage amounts cost less, falling as low as $0.075 per gigabyte for customers storing in excess of 1,024 TB of data.

Other cloud products will have tiered pricing models of their own, and these pricing changes will roll out periodically over the course of the year.

According to a company press release, these rates are all there are. Chief Technology Officer John Engates averred: There are "no hidden costs or extra charges. ... This simple and straightforward pricing approach is a key part of how we help customers take advantage of the real value of the Rackspace Open Cloud."

Investors reacted negatively to the news, bidding down Rackspace shares 1.3% in Friday trading, to close at $54.59.