Cloud Price Wars

A few weeks ago, during Google Cloud Platform Live, Google introduced a re-branded suite of cloud services at reduced prices - re-entering the cloud space as a major player. This was the first domino that ushered in an industry-wide reduction in cloud computing costs.

We think cloud pricing should track Moore’s Law, so we’re simplifying and reducing prices for our various on-demand, pay-as-you-go services by 30-85% - Google Cloud Platform Blog

Shortly after Google Cloud Platform Live, Amazon Web Services announced a significant reduction in pricing as well. EC2 prices dropped by close to 30% across the board and S3 storage costs were cut as deep as 65%. The graph below is part of a 2010 AWS blog post outlining the decrease in cloud computing costs over time.

EC2 prices are shrinking over time

AWS will even assign a Trusted Advisor to your account to go over your entire solution and recommend ways to re-provision AWS services to save you even more money.

If you’ve been reading this blog for an extended period of time you know that we reduce prices on our services from time to time, and today’s announcement serves as the 42nd price reduction since 2008. - AWS Blog

Finally, Azure entered the price slashing fray and announced their own reductions (and a shiny new management portal) in response to AWS - something Microsoft explicitly cites as a primary driver for the newest round of discounts.

Consistent with our previously announced commitment to match Amazon on prices for commodity services, we are cutting prices on compute by up to 35% and storage by up to 65%. We recognize that economics are a primary driver for some customers adopting cloud, and stand by our commitment to match prices and be best-in-class on price performance. - MSDN Blog

I’ve never seen a service offering before, in any industry, that not only slashes prices regularly, but automatically updates your account to reflect the cheapest possible pricing without you asking them. I wish my U-verse service worked the same way.

Cloud pricing is in a constant move downward resulting in an ever-increasing incentive to move to the cloud. It is becoming harder and harder to justify purchasing new servers, real-estate, and security just to add additional computing power to a data center - not to mention waiting weeks or months for the hardware to arrive. Companies entrenched in an on-premises way of thinking are going to find themselves at a disadvantage as the cloud continues to evolve.

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What do you think?