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Nonstop cloud computing price war: Amazon, Google both drop rates again

By Brandon Butler
April 5, 2013 12:08 PM ET

Network World - Just as industry watchers have predicted, the race to the bottom for cloud computing prices continues.

On Thursday, while announcing that the beta tag has been removed from the Google Compute Engine (GCE) cloud service, Google also reduced prices for the on-demand virtual machines by 4% across the board.

Not to be outdone, about 12 hours later -- almost as if it was waiting for a competitor to make such a move -- Amazon Web Services (AWS) announced a 26% drop in prices for its Windows virtual machines (VMs) on demand. Take that Google, AWS seemingly said.

[ MORE CLOUD: Amazon's biggest competitor in the cloud: Salesforce.com? ]

Like most of the price reduction announcements from AWS, the market-leading cloud computing infrastructure as a service (IaaS) provider, this week's announcement of a price drop on AWS virtual machines (VMs) applies to only a subset of its services, this time focusing on its Microsoft Windows products.

Pricing for the default small VM running Windows OS dropped from $0.115 per hour to $0.091 per hour, a 21% drop. Other Windows VM types also fell in price, in some cases by an even higher percentage, including high-memory (now $0.51 per hour) and high-CPU (now $0.225 per hour).

The news of AWS's price reduction was seemingly in response to the announcement by Google that same day of its Amazon-competitor cloud. In a blog post earlier in the day on Thursday, Google engineers said the beta tag has been taken off the company's GCE. The IaaS on-demand VM service complements its Google App Engine (GAE) platform as a service (PaaS) already available on the market. Customers can now use GCE without being invited to do so by Google and without special arrangements from a salesperson, it said. There is a catch though: It requires a Gold support package, which costs $400 a month and includes 24/7 phone support and consultation on architecting the service.

As part of announcing the semi-general availability of its GCE, Google also announced a 4% price reduction of GCE prices. A standard GCE VM now costs $0.132 per hour, compared to $0.138 previously -- a 4.3% reduction in price. Though slightly more expensive than AWS's default VM, GCE's standard single-core VM packs more compute power than AWS's standard VM offering. GCE's base-level VM comes with 3.75GB of memory and 420GB of local disk, while AWS's standard offering comes with 160GB of local storage and 1.7GB of memory. Both AWS and GCE offer high-capacity VM sizes as well.

[ MORE: 100GB of free cloud storage ... with a catch ]

In a blog post announcing its price reduction on Windows VMs, Amazon said the move represents a focus the company has on offering Microsoft products and services from its cloud. In recent weeks the company has also advanced support for SQL Servers that run in its cloud by adding new drivers that increase performance and the number of supported volumes instances can handle, for example.

The effort to focus on Microsoft has been seen by some as one piece of Amazon's strategy to butter up its cloud services to entice enterprise buyers. Business Insider recently reported that Amazon is hiring sales reps pushing into the enterprise market faster than any other company selling to the enterprise, for example.

Network World senior writer Brandon Butler covers cloud computing and social collaboration. He can be reached at BButler@nww.com and found on Twitter at @BButlerNWW.

Originally published on www.networkworld.com. Click here to read the original story.
Reprinted with permission from NetworkWorld.com. Story copyright 2012 Network World, Inc. All rights reserved.
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