Google blows up cloud pricing; your move, Amazon

Mushroom cloud

So the most commonly heard comment at Google Cloud Platform Live was: How will Amazon respond? It has a chance to do so Wednesday at its Amazon Summit in San Francisco, just up the street from the Google event.

The quick story out of Google’s event Tuesday is it cut prices across most major services and all regions, for the moment robbing AWS of its low-cost provider championship. For example, Google standard storage is now $0.026 per GB, about a third of the price of Amazon S3, which comes in at about $0.076 per GB.

There is some nuance here. Cloudyn ran the comparisons and found that when you look at Amazon M1.large three-year reserved instances (5 cents per hour/$61.28 per month) compared to Google’s N1-Standard-2 instances (14 cents per hour/$69.26 per month), Amazon is cheaper. But that discounted price is based on an upfront payment of $1,028. That pay-in-advance financial commitment is what sticks in the craw of cloud developers who have to manage their instance usage. From what I can tell, very few commit to three-year RIs because they have no idea what their requirements will be over that time span. With Google, there are no such charges.

As Cloudyn CEO Sharon Wagner said via email:

“With Reserved Capacity, you pay a one-time fee, and then you get an hourly price reduction. Until now, Google price was somewhat cheaper than AWS on-demand, but could not compete with the reserved pricing. The latest reduction makes Google cheaper than almost any pricing model of one of the most popular AWS instances: m1.large.”

cloudynchart1

Nitty gritty aside, the big picture is that AWS wants to be known as “the” low-cost cloud provider and Microsoft has committed to meet any AWS price cuts. If Google assumes this title, the whole cloud pecking order gets thrown into disarray.

So, back to you, Amazon.

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