The cloud service price war heated up Monday with Google announcing price cuts of up to 30 percent for its Infrastructure-as-a-Service product Compute Engine, along with a new virtual machine (VM) instance that promises to save companies even more money.

In a post to the Google Cloud Platform Blog, Urs Hölzle, Senior Vice President, Technical Infrastructure claimed that Google Cloud Platform is now 40 percent less expensive for many workloads.

“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” Hölzle added.

The price cuts run as follows:

• Standard: 20 percent
• High Memory: 15 percent
• High CPU: 5 percent
• Small: 15 percent
• Micro: 30 percent

Along with the price reductions, Google also announced “Preemptible VM” which offers savings of up to 70 percent on batch jobs.

The Preemptible VMs are said to be identical to regular VMs, except availability is subject to system supply and demand.

The instances run on resources that would otherwise be idle, allowing Google to offer them at substantially reduced costs.

Price wise Preemptible n1-standard-1 VM’s run at $0.015/ hour compared to a regular n1-standard-1 VM which is charged at $0.050/ hour.

Price wars

The announcement from Google reignites once again the ongoing price war between itself, Amazon.com Inc. and Microsoft Corp. in the cloud computing space.

The question that arises is just how low can cloud computing prices go?

In the announcement Google compared its pricing to Moore’s Law, but many would argue that Moore’s law isn’t infinite; could pricing for cloud services seriously get to the point that users are paying hundredths of a cent or even millions of cent per hour?

There’s been no response from Google’s competitors yet following this announcement, but don’t be surprised to see price cuts from both Amazon and Microsoft in short shrift as previous salvos in the cloud pricing wars have nearly always resulted in a return fire on price.

More details on Google Cloud Platform’s Preemptible VM’s are available here.

Image credit: perpetually/Flickr/CC by 2.0