Google cuts Cloud Storage prices another 10% after Amazon S3 price cut

[mtgx]

Google is basically telling Amazon: "You do not want to play this price-cutting game with us".

It's a great strategy from Google especially if they think they can match any move from Amazon in this way, and if they can sustain it for a long period of time.

It's basically game theory, and at this point, Amazon would be smart to stop cutting prices just for the sake of out-competing Google on price. And if they do that, Google might also stop doing it, because as in game theory, they know continuing an aggressive price war in this manner is only going to hurt both of them, because they are both very resilient and they won't take each other out in this way anyway.

Amazon, the market leader, trying to beat Google on price, would be like Coca-Cola trying to beat Pepsi on price, and racing to the bottom. Coca-Cola has learned a long time ago that it's okay if Pepsi is slightly cheaper. Same goes for Verizon and AT&T.

I think they will both still continue to cut their prices at a regular time period, as hardware prices fall, but only for the sake of expanding the market and getting new classes of customers that otherwise wouldn't use their services, and not just to try and steal from each other.

[mlinsey]

Amazon is much more accustomed to operating a low-margin business than Google or Microsoft. Google's overall profitability can allow it to take bigger losses and subsidize its cloud services division if it wants to, but at some point, executives have to wonder if that's the most strategic use of those resources.

It's also not always the case that the leader competes on quality while the followers compete on price. In many industries, being the leader means you have infrastructure advantages and nobody can touch you on price, whereas others must serve smaller markets based on quality. Retail (both online and offline) is a good example. You'd be foolish to suggest that Amazon (the retail side) or Wal-Mart give up competing on price and let their smaller competitors take that mantle.

[hcarvalhoalves]

I doubt people choose Google's Cloud Platform over Amazon based on price.

[jpdoctor]

> Google is basically telling Amazon: "You do not want to play this price-cutting game with us".

I hope both players go ahead and play. Let's see who wins.

[recuter]

OP is showing the old prices for Amazon. New prices: http://aws.amazon.com/s3/pricing-effective-december-2012/

Google went to $0.095 a few days ago. S3 went from $0.125 to $0.095 per gig.

Google has undercut again by going to $0.085.

I like this very much. Hey Amazon, I heard Google also called your mamma fat, are you just going to take it?

[wmf]

Google responds to Amazon, but Amazon doesn't need to respond to Google.

[bitcartel]

I wonder if DreamHost will lower the price of DreamObjects (built on Ceph) which remains at $0.07, given that the gap between them and Google/Amazon has narrowed.

http://dreamhost.com/cloud/dreamobjects/pricing/

[hosay123]

As if in reply to my comment yesterday, Google continues to validate its service not by competing on quality or feature distinction, but by throwing gobs of cash at it, as they have done every other 'successful' effort outside of core search and Gmail.

Man, if only there was a single serious App Engine-compatible competitor, prices there would be at the sub-penny level by now given the fair value of that junk. Only it seems designed from the outset for this scenario to never occur, and so why would I trust my future forward compatibility to another of their cloud efforts (or the mercy of their customer support ethos)?

[lawdawg]

Chrome, Android, Maps, AdWords (or pretty much all their Ads products), YouTube, Analytics, Docs ... should I keep going?

[jrockway]

What feature distinction is there for cloud storage? You upload bits and later download the same bits.

[meritt]

Amazon responds to Google by not shutting down successful new services and alienating users.

[ceph_]

What free services has amazon ever provided?

[tnuc]

The only people who will switch are people/companies with a lot of data where it may be cost effective.

Most small developers will stay away from Google. Amazon offers a 12 month tier free. Google offers prices and terms that change with 30 days notice.

The AWS conference is still on with Jeff Bezos talking in half an hour. Anyone care to guess what his response to this may be?

[rsync]

We've been at 7.9 cents/GB[1], per month, for a few months now, and neither google nor amazon is responding to our price point.

How odd!

[1] http://www.rsync.net/products/pricing.html

[Xylakant]

You're very much more expensive in the brackets below 10TB amazon takes around 10cent, you up to 24. Break even is in the bracket between 10 and 49 TB but after that amazon again undercuts you with 7cent/GB/month. With you I have to pay in advance and not by monthly usage - at least that's how I read your product page.

Now there may or may not be other reasons to choose your service (data center in switzerland is appealing) but according to your pricing page, you're only cheaper in a very narrow window.

[ddorian43]

Dreamhost and Constant are cheaper for example.

[sologoub]

Really like the DRA concept from google - same durability, but reduced availability.

Comparing to reduced durability of Amazon RRS, it's a nice happy medium between the normal storage and Glacier.

[okrasz]

Sounds like a price war started between Google and Amazon. Good :) Hopefully other providers will join. BTW - you can compare cloud prices at http://www.cloudorado.com

[ddorian43]

do you know of a price comparison of s3 alternatives (not ec2)?

[general_failure]

This is a great example of how competition is good for the customer.

[dudus]

Can Google Cloud Storage be used to just store personal Backups? Getting started with the service it seems that it's really targeted to developers. Why can't Google build an interface and offer it as a backup solution.

Maybe that would compete with their other offer of Buying Google Drive storage for five times the price.

[wmf]

There are a variety of third-party backup apps. Many of them only support S3 and sometimes Rackspace, but they may add Google support now that it's cheaper. See http://gladinet.blogspot.com/2011/11/google-has-been-providi... http://www.zmanda.com/backup-google-cloud-storage.html

[CurtHagenlocher]

Are these prices for locally redundant storage or for georedundant storage?

For reference, Azure's prices for those are 0.0931 and 0.125, respectively. I wonder if they'll be dropped as well in reaction to these changes.

[nfm]

How can they drop their prices by 30% and still make anything? I was under the impression that the margins for S3 and Cloud Storage weren't that high.

[notatoad]

Hardware costs drop over time. The servers they needed to power S3 cost more and required more power a couple years ago than they do now. It only makes sense that the price of the service continues to drop.

[saurik]

Google makes virtually all of their money on advertisements: almost everything else (from phones to services) they seem to be willing to do at cost.

[kmfrk]

I think they've wanted to make the margins on bandwidth for a while.

[hayksaakian]

How easy is it to switch my usage to google from s3?

Right now i have a rails app that uses carrierwave to manage images and store them on s3.

All i needed to get s3 set up was two lines of config, a ruby gem, setting some heroku config variables to the api keys.

How easy is it to switch?

[hm8]

Whatever happened to Google's Don't be evil! May be the effect died long back with all the law-suites against them.

Just nitpicking but the author is adding percentages when they clearly should not be.

[ars]

How is that evil?

You are right about the percentages though. 20% + 10% = 32% not 30%. They actually cut a further 8.3%.

[dkroy]

Price wars this never ends well, where have I seen this before...?

[jordanthoms]

You mean always ends well?

[ck2]

At the same price, I'll go with the one that is the first to eliminate any charges for get/put requests.

For public hosting of many smaller objects those gets add up fast.

[drawkbox]

And thus begins the market exchange of bandwidth/storage.

This is nice because it also helps make it cheaper for startups and product development.

[frm1001xplrr]

Welcome to Cloud Pricing a´la Oil Pricing

The Confusement of Variable Pricing Throughout the Day

Storage is King

Datacenters are the New Parking Lots

Computation is the Future Occupant

[frm1001xplrr]

...unless Amazon matches Google and retorts "let's battle this out on agility, support, security, service"

[Nux]

If they had balls they'd make it FREE!!!1

[fiendsan]

they did and then they shut it down :\