Google shakes up cloud services market with another price cut

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Google has fired back at Microsoft with cheaper cloud services, signaling another round of price cutting in an increasingly competitive market.

Citing enhanced efficiency in its data centers as well as falling hardware costs, Google on Wednesday said it was cutting prices of its Google Compute Engine by about 10% for all instance types in every region.

Rival Microsoft announced last week cuts in the prices of some of its Azure services, available when purchased directly through its website.

In March, Google had announced cuts in cloud services prices, ranging from 32% for its Compute Engine, which runs large-scale workloads on virtual machines hosted on Google's infrastructure, to 85 percent for Google BigQuery, designed for analyzing big data in the cloud.

Competitor Amazon Web Services announced cuts in the prices of its services a day after Google, followed by cuts from Microsoft.

Google said at the time that cloud services pricing hadn't followed a drop in hardware prices. Over the past five years, hardware costs were down by 20 to 30% annually but public cloud prices fell at just 8% per year, it added.

Microsoft said last Thursday it was cutting the prices of some of its mobile and networking services by a minimum of 27%. The cuts covered a number of services including the BizTalk integration service, cache, data transfer, mobile services, multi-factor authentication and SQL Server for virtual machines.

The current price cut by Google is expected to be followed by one by AWS. Microsoft has also previously said it will match Amazon's prices in commodity services.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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