Blog Post

Google blows up cloud pricing; your move, Amazon

So the most commonly heard comment at Google Cloud Platform Live was: How will Amazon(s amzn) 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 goog)’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.”


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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12 Responses to “Google blows up cloud pricing; your move, Amazon”

  1. Sean Wilson

    at the rate at which Technology is changing, why would I pay 3 years upfront for today’s technology? Month to month is the name of the game and cheap does not necessarily translate to better. When it comes to critical applications, will I sacrifice performance for price? Not if I want to keep my job as CTO. In my opinion, these giants are fighting the wrong fight – real one is Performance, Security and Control

  2. Vittaly Tavor

    Tim, the differentiator is the quality of the storage, the nuances of the packages and the integration with additional services.
    For example, Google storage is faster, so where on Amazon you would have to use S3+CloudFront, on Google in many cases you would be able to serve the content directly from their storage. This is a huge differentiator.
    On the other hand, Google offers a special reduced-availability (DRA) storage for backups at only $0.02/GB/month. However this is still far from Amazon Glacier at half that price.

  3. Vittaly Tavor

    Todd, the average S3 price takes into account the statistics of the customers, and roughly what most customers are paying for S3. It so happens, that most of the customers are paying for the 1TB to 49TB tier. Hence the average number in the article.
    Obviously companies like DropBox are paying an even lower price.
    But these prices are no more relevant. Amazon announced a drop in S3 prices starting April 1, and now it’s in the range of $0.029-$0.03. It’s still a bit higher than Google, but insufficiently so to move out.

  4. Todd Shaffer

    The above breakdown is only true if you’re comparing the first TB of storage on AWS and even then, this article is inaccurate:

    Standard Reduced Redundancy Glacier
    First 1 TB / mo $0.085 / GB $0.068 / GB $0.010 / GB
    Next 49 TB / mo $0.075 / GB $0.060 / GB $0.010 / GB
    Next 450 TB / mo $0.060 / GB $0.048 / GB $0.010 / GB
    Next 500 TB / mo $0.055 / GB $0.044 / GB $0.010 / GB
    Next 4000 TB / mo $0.051 / GB $0.041 / GB $0.010 / GB
    Over 5000 TB / mo $0.043 / GB $0.034 / GB $0.010 / GB

    “which comes in at about $0.076 per GB…”

  5. Regarding: “Amazon is cheaper. But that discounted price is based on an upfront payment of $1,028”

    That’s not true. Vendors reduce prices over time. What paid to Amazon upfront won’t be prorated when Amonzore reduce prices. Best one will get will be new lower hourly usage charge. If factor in price reduction over time, Google’s most like cheaper.