5 reasons why Google can catch Amazon in the cloud

Amazon dominates the cloud but analysts say don't count out Google

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For example, in March, Google slashed its pricing. Google Compute Engine now costs, on average, 32% less. Google Storage also has been cut, on average, 68%, while prices for Google BigQuery on-demand analysis services were cut by as much as 85%.

The day after Google's pricing announcement, Amazon Web Services followed with what was its 42nd price reduction since it started the business. For instance, the price of Amazon's Simple Storage Service was lowered by an average of 51%.

"If you think about one of the key drivers of enterprises moving to the cloud, it makes it possible for many small to medium enterprises to have an IT department with minimal upfront capital expenses," Rebello said. "Google is trying to attack the pricing equation. If they do that while also attacking security concerns, then they are attacking the barriers to adoption."

Google, he added, has the tenacity to aggressively drive down prices to lure in both businesses new to the cloud, as well as drawing in what had been AWS customers.

4. Google may be making big capital investments

Without offering specifics, Google executives said in an earnings call this month that it is focused on capacity and investing capital to make sure it has more than enough capacity to meet clients' needs.

"Google is making the capital investments it needs to alleviate some of the concerns an enterprise IT manager might have about going with their cloud services," Rebello said. "If your data is sitting in the cloud, enterprise IT is going to worry about security and having the processing power when you need it. Google wants to make sure you have the power when you need it." That, he added, will make Google a better choice when IT administrators go shopping for a cloud service.

5. Google's future strategy hinges on the cloud

Google is placing the cloud at the center of its strategy to enable the company to remain a major Internet player in the years to come.

Early this year, Google bought Nest Technologies, a company that makes a smart-home thermostat that can be programmed from users' mobile phones. Google spent $3.2 billion in cash for the company that will put Google squarely in the connected-home market.

Rebello pointed out that Nest is also a cloud-based player.

The smart thermostat will sit in people's homes but its smarts will reside in the cloud. Since Nest is just the first step into a smart home that will have smart appliances, smart door locks and windows, the cloud will be needed to store all of that new information in the trend known as the Internet of Things.

"If you talk about a future where lights, doors, windows and appliances are all connected through a digital gateway, the thermostat is just one element, but it's a key element that can learn consumer behavior and adapt to it," Rebello said. "This is all a cloud strategy. If Google wants to be a player in this smart home market, it needs the cloud behind it."

Google's focus on the cloud is unlikely to waver, making it a long-term challenger to Amazon's cloud dominance.

Many people in IT say the future lies in the cloud. They're just trying to figure out how to get there, how fast to get there and which service they'll go with. That opens a big door for Google.

"I don't think we'll be looking at a company that's in the number one position steadily," said Kagan. "It'll be an ebb and flow. I would say Google and Amazon will be beating the heck out of each other."

This article, 5 reasons why Google can catch Amazon in the cloud, was originally published at Computerworld.com.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed . Her email address is sgaudin@computerworld.com.

See more by Sharon Gaudin on Computerworld.com.

Copyright © 2014 IDG Communications, Inc.

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