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Google, Amazon Cut Cloud Prices Again

The battle for cloud supremacy intensified again.  At its Cloud Platform Live event Tuesday, Google slashed the prices for its cloud services lower than Amazon and Microsoft. Amazon responded with similar cuts. No news from Microsoft yet, but one thing is clear.

The big winners are cloud users.

Google Cloud Computing

In his keynote speech at the event this week, Urs Hölzle, senior vice president for of technical infrastructure at Google, said the move was aimed at realizing the real promise of cloud computing: to make computing simple for everyone.

He also announced Google is introducing new DevOpps tooling, Managed Virtual Machines (VM) for App Engine, real-time Big Data analytics with Google BigQuery and other technical improvements to improve cloud performance.

But the focus now is on the massive cuts in pricing. In a blog post, he argued that the real potential of cloud computing has yet to be realized:

The original promise of cloud computing was simple: virtualize hardware, pay only for what you use, with no upfront capital expenditures and lower prices than on premise solutions. But pricing hasn’t followed Moore's Law: over the past five years, hardware costs improved by 20 percent to 30 percent annually but public cloud prices fell at just 8 percent per year."

And Google aims to remedy this, with cuts of as much as 85 percent off  its big data query tool, Big Query on-demand. While this will have IT departments salivating with anticipation, for regular business users, the really notable point will be a further reduction in cloud storage prices. The pricing overall will look like this:

  • Compute Engine reduced by 32 percent across all sizes, regions and classes
  • App Engine pricing is drastically cut for instance-hours by 37. 5 percent, dedicated memcache by 50 percent and Datastore writes by 33 percent. In addition, many services, including SNI SSL and PageSpeed, are now offered to all applications at no extra cost
  • Cloud Storage is now 2.6 cents per GB or around 68 percent less for most customers
  • Google BigQuery on-demand prices reduced by 85 percent

 On top of this, Google is also offering what is effectively a loyalty bonus for continued and constant use of Google cloud computing services.

Google cloud pricing.jpg

Google is also offering Sustained-Use Discounts for steady-state workloads. These will kick in as soon as business users use a virtual machine (VM) for more than 25 percent of a month. The discount jumps to 30 percent for an entire month of use, a reduction of 53 percent over the former prices.

One of the other additional advantages for enterprises is that they don’t have to predict what cloud services they likely to use over the month, neither do they have to sign up to Google for extended period of times to benefit from the reductions.

Amazon Responds

Amazon isn’t letting Google steal all thunder. Only 12 hours after Google shared the news, Amazon kicked-in with its own price cuts that will see its S3 storage service costs drop up to 51 percent less. Amazon also said it was making its desktop-as-a-service generally available, putting pressure on Microsoft’s One Drive and Office offerings in the cloud. Prices for S3 now look like this:

Amazon S3 Pricing.jpg

It is also reducing EC2 cloud computing platform, Elastic ache, Elastic Map Reduce and RDS cloud databases. The prices can be seen behind this link.

However, in this week’s skirmish the spoils have to go to Google given how wide ranging the price cuts are combined with the other technical developments that make its cloud services considerably more attractive than they were. If Google was a late entry in the wider cloud computing fray, it has invested truckloads of money into its services to catch up, which it has, at this stage managed to do.

All that remains now is to see how Microsoft reacts. It is unthinkable that it won’t make some kind of similar gesture along the same lines. Keep in mind that Microsoft Build starts next week, and even before that Satya Nadella will be holding a press conference in San Francisco later today.

Between the two events there should be some kind of indication as to how Microsoft will react to this latest round of cutting. It’s gotta’ be said: competition rocks!

 
 
 
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