Google slashed prices on its cloud computing products today, just a month after Amazon surprised everyone by revealing that its own cloud business was profitable.
In a blog post today, Urs Hölzle, Google’s SVP of technical infrastructure, said it was cutting Google Cloud Platform prices by up to 30 percent, which is in line with the company’s commitment to continually reduce prices in accordance with Moore’s Law.
The three major cloud-computing companies, Google, Microsoft and Amazon, are in a constant battle to win customers, and all use price as a major selling point. With this decrease from Google, expect the others to follow closely behind with cuts of their own.
For the first time in April, Amazon revealed how well its Amazon Web Services business is doing, with CEO Jeff Bezos bragging that it’s a $5 billion business annually, “and still growing fast — in fact it’s accelerating.” To the surprise of many, it is also profitable, pulling in a profit of $265 million on revenues of $1.57 billion during the first quarter.
Clearly, Google felt there was room to play in the margins.
It is reducing the prices of the virtual machines by up to 30 percent, claiming that it is now 40 percent less expensive than other providers for certain workloads (your exact savings depend will vary depending on the application, it says). Since launching the service in November 2013, prices have been cut by more than half.
Of course, slashing prices is something Amazon is very comfortable with, having trimmed prices 40 times in the past eight years.
Here’s a chart from Google detailing the new prices based on usage: