
Google cuts Cloud Storage prices another 10% after Amazon S3 price cut - mfringel
http://thenextweb.com/google/2012/11/29/in-response-to-amazons-price-cuts-google-cuts-cloud-storage-prices-by-another-10-for-a-total-of-30/
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mtgx
Google is basically telling Amazon: "You do _not_ want to play this price-
cutting game with us".

It's a great strategy from Google especially if they think they can match any
move from Amazon in this way, and if they can sustain it for a long period of
time.

It's basically game theory, and at this point, Amazon would be smart to _stop_
cutting prices just for the sake of out-competing Google on price. And if they
do that, Google might also stop doing it, because as in game theory, they know
continuing an aggressive price war in this manner is only going to hurt both
of them, because they are both very resilient and they won't take each other
out in this way anyway.

Amazon, the market leader, trying to beat Google on price, would be like Coca-
Cola trying to beat Pepsi on price, and racing to the bottom. Coca-Cola has
learned a long time ago that it's okay if Pepsi is slightly cheaper. Same goes
for Verizon and AT&T.

I think they will both still continue to cut their prices at a regular time
period, as hardware prices fall, but only for the sake of _expanding the
market_ and getting new classes of customers that otherwise wouldn't use their
services, and not just to try and steal from each other.

~~~
hcarvalhoalves
I doubt people choose Google's Cloud Platform over Amazon based on price.

~~~
nivla
One of the main reasons I personally wouldn't choose Google over Amazon no
matter how much they lower the price is due to the lack of a solid customer
support. God forbid if something goes wrong, not only will I risk losing the
Cloud account but also everything else linked to them including Adsense.

Also, Google has a history shutting down unviable services and as these
competitive price cuts continues, it gets more risky to keep betting on
Google.

~~~
JulianMorrison
A history shutting down unviable services is a glass half full. On the upside,
it means they won't permit a service to limp on, viewing its customers as
burdens and providing terrible service in the hopes they go away.

~~~
jlgreco
In either of those scenarios, migration off their services would become
necessary. But if they keep it limping instead of cutting it off, that I think
facilitates safer more cautious migration (if for no other reason, because it
would give you more time to do so). In that respect, keeping the service
limping would probably present the superior customer service experience.

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recuter
OP is showing the old prices for Amazon. New prices:
<http://aws.amazon.com/s3/pricing-effective-december-2012/>

Google went to $0.095 a few days ago. S3 went from $0.125 to $0.095 per gig.

Google has undercut again by going to $0.085.

I like this very much. Hey Amazon, I heard Google also called your mamma fat,
are you just going to take it?

~~~
wmf
Google responds to Amazon, but Amazon doesn't need to respond to Google.

~~~
recuter
Hey. HEY. HEY! We might switch, they don't know for sure, what? Ambiguity. Get
with it. Amazon if you don't match the Google prices we all _might_ switch.
Whatchagonado.

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hosay123
As if in reply to my comment yesterday, Google continues to validate its
service not by competing on quality or feature distinction, but by throwing
gobs of cash at it, as they have done every other 'successful' effort outside
of core search and Gmail.

Man, if only there was a single serious App Engine-compatible competitor,
prices there would be at the sub-penny level by now given the fair value of
that junk. Only it seems designed from the outset for this scenario to never
occur, and so why would I trust my future forward compatibility to another of
their cloud efforts (or the mercy of their customer support ethos)?

~~~
lawdawg
Chrome, Android, Maps, AdWords (or pretty much all their Ads products),
YouTube, Analytics, Docs ... should I keep going?

~~~
jsankey
While I think the grandparent is understating Google's success, it's worth
noting that in your list AdWords comes under search (to me, at least), and the
only other item that wasn't born out of acquisition is Chrome. Of course this
is a perfectly rational strategy for Google and in the case of, e.g. Android,
what they've managed to do with it since acquisition is remarkable. It's just
worth remembering a lot of the successes come from spotting a startup on the
rise and snapping it up.

~~~
magicalist
This is a bit of a tangent, but at some point I find the "it was really an
acquisition" thing becomes rather silly, as there is very little difference
between hiring people specifically because of their experience and ideas in a
product area and a startup of some people with experience and ideas but no
actual product yet. Maps and Android definitely fall under that second group,
as Where 2 essentially thought that web mapping was a good idea, but hadn't
actually done it yet, and Android didn't release _anything_ until two years
after acquisition, let alone ship an actual phone (which came a year after
that).

There can be insight there (one great property of startups en masse is that
they serve as a great experimental method for proving zanier ideas will work
or market segments can exist if a product is made for them), but there does
come a point where it's like saying Google's success in AI research is because
they spotted AI researchers and snapped them up. Well...yeah, employees
usually are hired for the job they were hired for.

Regardless, the original poster's criteria was "Google continues to validate
its service not by competing on quality or feature distinction, but by
throwing gobs of cash at it", which I think the GP's examples clearly
contradict, as all of them have continued to gain quality (for some people's
definition of quality) and feature distinctiveness.

~~~
jsankey
It's definitely not black and white, and I called out Android for specifically
that reason. I wasn't actually aware that maps was not a web product at all
when acquired so you're quite right that it fits into the same category.

To take the tangent further off topic it's interesting to me that Google's
greatest successes post-search/ads appear to be these strategic products. Not
things that bring direct profits, but those that allow them to influence the
major platforms (mobile, web). Committing key resources in this way speaks of
long-term thinking that other companies could learn from.

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meritt
Amazon responds to Google by not shutting down successful new services and
alienating users.

~~~
ceph_
What free services has amazon ever provided?

~~~
meritt
Is this comment based on the assumption that because users do not pay for most
of Google's services, they should have zero expectations about the
availability and longevity of said service? If so, let me approach this from
the reverse:

A company creates a service to generate revenue. Google provides numerous free
services from which they show advertisements (or crowdsource free labor such
as the google voice training system or google image search tagging "game") to
generate revenue. Another company might charge for said service but not flood
me with advertisements. Both companies make revenue from their service
offering.

Why is it okay for Google to shutdown services (which either served their
purpose or weren't profitable) but so unspeakable if another company were to
do the same for a paid service?

Regardless if you agree with that viewpoint or not, at the end of the day,
Google has a long history of creating products, gaining users, and shutting
down those products. This history has made it extremely difficult for them to
break into a market such as this one because quite frankly nobody trusts that
the product will be around very long. The utter lack of customer service also
makes it difficult to place faith in their systems.

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tnuc
The only people who will switch are people/companies with a lot of data where
it may be cost effective.

Most small developers will stay away from Google. Amazon offers a 12 month
tier free. Google offers prices and terms that change with 30 days notice.

The AWS conference is still on with Jeff Bezos talking in half an hour. Anyone
care to guess what his response to this may be?

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rsync
We've been at 7.9 cents/GB[1], per month, for a few months now, and neither
google nor amazon is responding to our price point.

How odd!

[1] <http://www.rsync.net/products/pricing.html>

~~~
Xylakant
You're very much more expensive in the brackets below 10TB amazon takes around
10cent, you up to 24. Break even is in the bracket between 10 and 49 TB but
after that amazon again undercuts you with 7cent/GB/month. With you I have to
pay in advance and not by monthly usage - at least that's how I read your
product page.

Now there may or may not be other reasons to choose your service (data center
in switzerland is appealing) but according to your pricing page, you're only
cheaper in a very narrow window.

~~~
frm1001xplrr
> Break even is in the bracket between 10 and 49 TB but after that amazon
> again undercuts you with 7cent/GB/month

did, i mean did.. did you graph and solve that mentally while browsing the
pricing page?

~~~
Xylakant
No need to graph. They both list the brackets and the prices.

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sologoub
Really like the DRA concept from google - same durability, but reduced
availability.

Comparing to reduced durability of Amazon RRS, it's a nice happy medium
between the normal storage and Glacier.

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okrasz
Sounds like a price war started between Google and Amazon. Good :) Hopefully
other providers will join. BTW - you can compare cloud prices at
<http://www.cloudorado.com>

~~~
ddorian43
do you know of a price comparison of s3 alternatives (not ec2)?

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general_failure
This is a great example of how competition is good for the customer.

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dudus
Can Google Cloud Storage be used to just store personal Backups? Getting
started with the service it seems that it's really targeted to developers. Why
can't Google build an interface and offer it as a backup solution.

Maybe that would compete with their other offer of Buying Google Drive storage
for five times the price.

~~~
wmf
There are a variety of third-party backup apps. Many of them only support S3
and sometimes Rackspace, but they may add Google support now that it's
cheaper. See [http://gladinet.blogspot.com/2011/11/google-has-been-
providi...](http://gladinet.blogspot.com/2011/11/google-has-been-providing-
cloud-storage.html) <http://www.zmanda.com/backup-google-cloud-storage.html>

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CurtHagenlocher
Are these prices for locally redundant storage or for georedundant storage?

For reference, Azure's prices for those are 0.0931 and 0.125, respectively. I
wonder if they'll be dropped as well in reaction to these changes.

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nfm
How can they drop their prices by 30% and still make anything? I was under the
impression that the margins for S3 and Cloud Storage weren't that high.

~~~
notatoad
Hardware costs drop over time. The servers they needed to power S3 cost more
and required more power a couple years ago than they do now. It only makes
sense that the price of the service continues to drop.

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hayksaakian
How easy is it to switch my usage to google from s3?

Right now i have a rails app that uses carrierwave to manage images and store
them on s3.

All i needed to get s3 set up was two lines of config, a ruby gem, setting
some heroku config variables to the api keys.

How easy is it to switch?

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hm8
Whatever happened to Google's Don't be evil! May be the effect died long back
with all the law-suites against them.

Just nitpicking but the author is adding percentages when they clearly should
not be.

~~~
ars
How is that evil?

You are right about the percentages though. 20% + 10% = 32% not 30%. They
actually cut a further 8.3%.

~~~
strumbringer
If you look at the actual old and new prices, it actually could be over 30%
depending on how much you use.

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dkroy
Price wars this never ends well, where have I seen this before...?

~~~
jordanthoms
You mean always ends well?

~~~
sliverstorm
No, not always. A bitter race-to-the-bottom always seems to lead to feature
cuts, reduction in quality, etc.

It is for this reason I prefer a nice, friendly, slow price war. I guess you
could say the kind of price war where it is in fact a _product_ war- price is
only one of the many _battles_ being waged.

~~~
dkroy
Yeah that was my view on it, although I can see if they slow down a bit this
can be good for the customer. This all just seems a little too quick.

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ck2
At the same price, I'll go with the one that is the first to eliminate any
charges for get/put requests.

For public hosting of many smaller objects those gets add up fast.

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drawkbox
And thus begins the market exchange of bandwidth/storage.

This is nice because it also helps make it cheaper for startups and product
development.

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frm1001xplrr
Welcome to Cloud Pricing a´la Oil Pricing

The Confusement of Variable Pricing Throughout the Day

Storage is King

Datacenters are the New Parking Lots

Computation is the Future Occupant

~~~
frm1001xplrr
...unless Amazon matches Google and retorts "let's battle this out on agility,
support, security, service"

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Nux
If they had balls they'd make it FREE!!!1

~~~
fiendsan
they did and then they shut it down :\

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jdelsman
OH NO SHE DIDNTTTTTT

