Google drops on a bomb on AWS, announces massive cut in cloud prices

medium_510672745Google has just slashed the costs of its cloud services way, way below those of its rivals, as the search giant steps up its efforts at unseating Amazon as the kings of the cloud.

The company made a whole raft of announcements at its Google Cloud Platform event in San Francisco yesterday, the biggest being a 68 percent price cut across the board for its cloud storage services; in addition to a similar cut for its Google App Engine; slashing 32 percent off of its Google Compute prices; and a whopping 85 percent off of its Big Query Big Data analysis tool. The cuts mean that Google’s new cloud storage prices are now the lowest of the low – at just $0.037 cents per GB, which is quite a considerable discount for anyone who’s storing petabytes of data with someone like AWS.

Google noted that the cloud industry was seeing prices fall by around six percent each year, which is some way short of the 20 percent decrease in hardware costs each year. And that, says Google, isn’t fair on cloud users.

“Together we are resetting the price curve in the cloud to where it should be,” said Urs Hölzle, Google’s king of the cloud. “This is a philosophy. The price curve of virtual hardware should follow the price curve of real hardware.”

Aside from these basic price cuts, Google is also rolling out further discounts – known as “sustained-use discounts” for those who use its Compute Engine service 24 hours a day, seven days a week, over the course of a month, giving them an additional 53 percent discount on today’s prices.

Sustained-use discounts

Just like Microsoft, Google was somewhat slow to arrive on the cloud computing scene, and failed to realize the threat posed by AWS until it was too late. Since then, it’s invested a shed load of cash into services like Google App Engine and Google Compute to help it catch up, and its now suddenly become far, far cheaper than its rivals – although it may not be so for much longer.

As has always been the way, the cloud is extremely competitive and with the Amazon Web Services summit taking place today, we won’t be at all surprised if AWS responds in kind.

Even so, Hölzle insists that Google holds the advantage. He points out that Google’s computing infrastructure is so massive – don’t forget it also has to run things like Google Search and Gmail as well as its cloud services – that it’s rivals can’t compete. No one buys hardware in such bulk as Google does, and this means it can always keep its prices lower, or so the argument goes.

Perhaps, but AWS runs a pretty enormous ship too, and there’s always cases where cloud services cost more than buying your own hardware. But buying your own hardware means you also have to manage it, and that’s why so many are turning to the cloud – so long as it isn’t ridiculously expensive, it’s a much more cost-effective option for many enterprises, and that’s why Google is bringing down its costs.

photo credit: Pierre J. via photopin cc