News

Cloud Price Wars Continue with Google Cuts

• By David Ramel
• 05/18/2015

With today's news of Google Cloud Platform price cuts, users of the Amazon Web Services Inc. (AWS) cloud are likely anticipating a response from their service, based on the past history of cloud vendors' tit-for-tat matching of pricing moves.

Google has reduced pricing across all Google Compute Engine Instances, and the cost of running virtual machines (VMs) in the Google cloud has dropped by up to 30 percent.

"Compared to other public cloud providers, Google Cloud Platform is now 40 percent less expensive for many workloads," company exec Urs Hölzle said in a blog post. "Starting today, we are reducing prices of all Google Compute Engine Instance types as well as introducing a new class of pre-emptible virtual machines that delivers short-term capacity for a very low, fixed cost. When combined with our automatic discounts, per-minute billing, no penalties for changing machine types, and no need to enter into long-term fixed-price commitments, it's easy to see why we're leading the industry in price/performance."

However, the performance part of that claim took a hit with new research last week that indicated the Google cloud generally performed far behind main rivals Microsoft Azure and AWS.

Regarding the price part of that claim, the cuts will soon be matched by AWS and Microsoft if past behavior is any indication of the future. The three primary cloud vendors are notorious for quickly responding to price cuts from others, as Gladys Rama pointed out in the article, "Microsoft: We'll Match Any AWS Price Cuts." The company famously did just that in January and April of last year, and AWS has answered back with retaliatory price cuts of its own in December.

So there's no reason to think today's move will result in anything different.

"The obvious question is when (not really if) Amazon Web Services and Microsoft will respond," Barb Darrow wrote in Fortune today.

In addition to the new pricing, Google announced the new "pre-emptible VMs" that allow for cheaper short-term jobs as they use otherwise idle resources if available. More on those can be found here.