After years of precipitous declines in the price of cloud computing, things seem to be stabilizing, and Google Cloud CEO Diane Greene thinks that’s because the nature of the customer is changing.
In an interview with GeekWire on the sidelines of Google Cloud Next 2018, Greene discussed several aspects of the modern cloud computing world but took some time to discuss pricing. While cloud market share has been relatively fixed for the last few years — with Amazon Web Services well out in front and Google trailing Microsoft Azure — the buyers of cloud services are changing as bigger multiyear deals get cut by high-ranking executives, as opposed to a dozen engineers running up bills on the company credit card.
And with those buyers, you take a different approach. And that is why Greene was hired to lead Google’s cloud group in 2015, when it was known for its prodigious tech skills and its difficulty related to the needs of average companies.
“You never want to win on price, you want to win on the value of your product,” Greene said. Enterprise customers want service-level agreements, bespoke consulting services, and integration help, and they are willing to pay for more than just the basic compute and storage services that launched cloud computing a decade or so ago.
In the early days of cloud computing, cloud providers raced down the price list cutting list prices for those basic services every few months. That started to change around 2016 as more and more companies started to realize how cloud computing could help their businesses.
And believe it or not, figuring out the price of cloud computing services can be even harder than figuring out how to use cloud computing services. That incentivizes buyers and sellers alike to cut deals where everything is spelled out ahead of time, giving buyers the assurance that they’ll have help when they need it, and sellers like AWS, Microsoft Azure, and Google Cloud a predictable revenue stream.
“It’s a reflection of us becoming more enterprise-focused, I think, and really looking at the business more holistically and the value we’re bringing and seeing the whole business together,” Greene said. “Because in addition to the service itself, we’re giving support for it and we’re giving engineering help to deploying it.”