On Wednesday, October 1, Google slashed price for its Google Compute Engine platform by 10% for all instances. The price cut represents yet another iteration on the trend of decreasing price cuts in the IaaS space as evinced by recent price reductions from Amazon Web Services, Microsoft Azure and Google itself. In a blog post announcing the change, Urs Hölzle, Senior Vice President, Technical Infrastructure at Google, noted that decreases in price in the IaaS industry were such that “only 20% of time is spent how it should be — building new products or systems that will be platforms for growth,” thereby allowing for increased time for application development. The results of Google’s IaaS cuts are reflected below:
Google’s price cuts render it increasingly competitive against the likes of Amazon Web Services, Microsoft Azure and the increasingly vibrant community of commercial OpenStack vendors. Holze proceeded to note how Snapchat, Workiva and sponsors of the 2014 World Cup differentially leverage the Google Compute Engine Platform to simplify their infrastructure needs. Meanwhile, Google’s Sundhar Pichai, SVP of Android, Chrome and Apps, reported at Atmosphere that Google Drive now claims 240 million users, or an increase of 50 million active users from June. The bottom line here is that Google is beginning to amplify its assault on enterprise cloud computing customers by cutting prices and rolling out educational campaigns to inform users of the benefits of its cloud platform. Google has the capital and cash position to cut prices further, so Amazon Web Services will need to take pay close attention to ensure that Google does not catch it off guard with an aggressive forthcoming price cut or promotion that brings in a slew of customers which cascades into a sizeable dent in AWS IaaS market share.