Google Announces Substantial Reductions In Cloud Services Charges To Stay Ahead of Competition

Google Inc. has slashed prices of its cloud-computing services to stay ahead of its competitors.

At the Cloud Platform event, Google stayed true to promise with substantial reductions across its entire bouquet of services that fall under the Cloud Computing Services. Cumulatively known as Google Compute Engine, the entire line–up has seen an overall drop of more than 30% across all sizes, regions and classes. Additionally, the company is trying to offer simplicity in pricing and tariffs.

Overall all the users of Google’s Cloud Services collectively utilize about 4,500 TB (Terra Bytes) of space per month. Now this space will cost about 2.6 cents per gigabyte. This is perhaps the biggest single reduction of 68%.

Why is Google slashing prices? The costs of hardware have come down significantly in the past few years, revealed Urs Holzle Senior Vice President, Google. He said, “Hardware costs have improved by 20 to 30 per cent during the past five years but that public cloud prices fell at just 8 per cent per year.”

What he actually meant was that public cloud prices have dropped only 6 to 8% annually, but hardware costs actually dropped 30 to 45% annually. Hence in all fairness, “The cost of virtualized hardware should fall in line with the cost of the underlying real hardware” added Holzle.

However, the company is slashing prices in the hopes of staying ahead of its direct competitor in this business, Amazon Inc. This company could be considered one of the pioneers in recognizing the need of tech companies. Amazon Web Services provide and support the underlying infrastructure for key aspects of popular Web companies such as Netflix Inc, Pinterest and many more startups who needed to have powerful computational and storage engines, but simply couldn’t afford to make that big an initial investment.

Small companies have always dreamt of having sophisticated and blazing fast servers that stored and churned data at real–time speed. Companies like Google and Amazon made it possible to only pay for using what these companies needed. Now Google is interested in retaining and expanding its user base for this segment. Will reductions in tariffs help?

Source | Techcrunch

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