Amazon’s Simple Storage Service, also known as Amazon S3, plans to change its pricing on Nov. 1 in a move that should help it stay ahead of competing cloud storage companies.

Amazon S3, and the larger suite of Amazon Web Services, provides the infrastructure for many of the web companies that we’ve covered. (As is often the case, one of the most effective demonstrations of S3’s importance came when it failed in February, and again in July, affecting startups like 37signals and Twitter.) Now, other tech players are getting ready to take it on. Google, for example, recently launched its App Engine, while Mosso (a division of Rackspace, the only venture-backed company to hold an IPO in the last few months) has announced plans to launch a storage service called CloudFS.

Amazon’s official reason for the price change is lower costs associated with economies of scale, but the incentive provided by increasing competition probably didn’t hurt.

Here’s how it will work: Instead of just charging a flat rate per unit of storage (15 cents per gigabyte, for example), Amazon has divided the pricing into four tiers, with the price decreasing as you use more storage. That could also help it tempt more big companies, or to remain affordable for startups as they grow.

In its announcement, Amazon also touts a some impressive usage data. S3 now stores 29 billion objects (a computer science term for an allocated region of storage), up from 22 billion a quarter ago — to make that dizzyingly large number a little more concrete, that’s four objects for every person on Earth. During peak usage on Oct. 1, S3 received 70,000 storage, retrieval and deletion requests. Sounds like the Internet cloud is alive, well and busy.

[photo: flickr/meaduva]

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