
The Dawn Of Cloud 2.0 And Why Google Started A Price War - testrun
http://techcrunch.com/2014/04/19/why-google-slashed-its-cloud-pricing-and-what-it-means-for-innovation-and-investors/
======
saurik
In 2012, Google cut their prices on November 26th, just before Amazon's
re:Invent conference. Amazon cut their prices on the 28th, and then Google cut
theirs _again_ on the 29th. This year, Google announced their price cut right
before Amazon's AWS Summit, which is where Amazon announced their price cut.

A lot of the reporting of this is Google driving the price cuts, with Amazon
being forced to react to Google's lowered prices; however, Amazon's major
price cuts have been part of coordinated events: you don't "suddenly react" by
dropping a price during a planned keynote at a long-before scheduled event.

Instead, I find it much more likely that Google keeps getting rumors of these
price cuts, and decides to beat out Amazon by announcing a day early to scoop
the attention; I am not certain I agree with the morals of such action
(without more public disclosure), but it definitely seems to be working for
them :/.

I'd thereby argue that Google just wants it to _look_ like they are trying to
fight a massive price war, but in fact they are constantly reacting to
Amazon's price drops, and Amazon is actually the leader in determining what
the price of this product should be; at best, Google is just opting to be
"just slightly lower".

~~~
crb
These events don't get booked with only a day's notice. And even if that was
the case, Amazon knew when Google's event was, and they could have published
their new pricing a day before that, and followed up at the event.

At their last event, Amazon only dropped the prices of services which have a
direct Google equivalent. To me, that's telling.

~~~
patrickaljord
Exactly. Plus Amazon is the market leader so they have little reasons to drop
prices like that not to mention that as the article say, their other business
(amazon.com) doesn't bring them huge profit. Google on the other hand doesn't
care as Ads is their true money maker, they can afford to have little to no
margin on their cloud offering.

------
m0th87
This article made zero sense. An example:

> Look at Fastly, a new August Capital-backed Edge Computing CDN built just
> for Mobile architectures. A new CDN? Not something we look to AWS and Google
> for. Yet.

I'm not sure how Fastly is built just for mobile architectures, and we're
happy customers of them. And AWS already has a CDN called CloudFront. Isn't
Google's PageSpeed Service essentially a CDN as well?

~~~
zobzu
its full of buzzwords and crap for the verylightly technical executive "woah
must not miss the cloud 2.0 train" salespeech.

~~~
bsaul
The only thing this article informed me of is that i'll now have to think
about what my answer will be next time a tech hipster asks if my service is
cloud 1.0 or 2.0. Probably a kick in the groin.

------
kryps
Google's API console is lightyears behind the AWS console. Similarly for
features, documentation,support forums and stability. Example re stability:
The cloud storage browser fails to display stuff stored in it regularly with
backend errors.

So the only way they can compete right now is on price.

~~~
mark_l_watson
One place where Google's admin console is better, I think, is in aggregated
logs that are supported by good filtering options to drill down as required. I
don't know what Amazon's internal developer experience is, but Google has
great tools for internal developers to examine logs, and in general very nice
infrastructure.

All that said, almost all of my consulting customers use AWS. I have never had
anyone pay me to do work on Google's public cloud offerings, although I
sometimes use them for personal projects.

------
bowlofpetunias
Just hot air.

Not a single plausible example of this "Cloud 2.0", except for one CDN service
that Google and AWS could easily compete with. Or buy if there's some special
sauce involved.

The simple fact is that Google tried to do go one level up with cloud services
beyond basic building blocks like raw compute power and storage (App Engine
etc.), and had their lunch eaten by Amazon. And later on even by Microsoft,
who's Azure is a much better fit for those enterprises already using MS tech.

So now Google is force to play catch-up, and dropping the price is the only
way they can even get people to pay attention.

Because let's face it, from the reactions her on HN it was obvious that the
price drop announcement was the first time many of us even bothered to
seriously check out Google's cloud offerings.

Google's case study page
([https://cloud.google.com/customers/](https://cloud.google.com/customers/))
isn't exactly brimming with big names, and most of the testimonials apply to
App Engine, which as far as I'm concerned is a niche product that has already
had it's lunch eaten by the likes of Heroku.

~~~
camus2
app engine is too complicated.let's take Heroku.Heroku is easy,i build my app
in whatever language,then push it through git. No sdk to download or anthing
else to do,and it basically supports any language I want.

Now let's take app engine:I have to download a sdk,write my app the way google
wants me to,use this or that ide...and what if I want to use language X that
is not supported? i cant.

Heroku is pragmatic because it relies on simple concepts like bash scripts and
git.that's all,I dont have to download python or java just to push something
in the cloud.

AppEngine has interesting addons though,but i just dont want to host my code
on appengine just to use them. And then there is the lockin stuff.Unless the
saas product is extremely complicated and impossible to "self" host, I would
not rely on any technology i cant migrate to my own servers or another cloud,
especially when it comes to data,I'd never ever use a appengine only database.

Google got it 100% wrong.

~~~
atmosx
And pray that in 3 years Google will not decide to drop App Engine.

~~~
crb
One of the points in the op-ed article we're discussing was the opportunity in
this market, which makes it worth investing in. If you're still not convinced,
I'd encourage you to read this interview [1] with Google's SVP of Technical
Infrastructure, where he spells out a shift in the way Google develops to
spend a majority of it's efforts in the cloud world.

> “It has become clear that the public cloud is the way of the future,” Hölzle
> says during an interview at Google headquarters. [..] “One day, this could
> be bigger than ads. Certainly, in terms of market potential, it is.”

If you still don't believe, Google Cloud Platform has a published deprecation
policy in its Terms of Service, which is very similar to that of other major
providers. In short, you get one full year's advance notice of the deprecation
of any supported service.

[1] [http://www.wired.com/wiredenterprise/2014/03/urs-google-
stor...](http://www.wired.com/wiredenterprise/2014/03/urs-google-story/)

~~~
brohoolio
One year deprecation is not long enough for anything enterprise. I wouldn't
put anything in Google that can't be picked up and moved to another provider
with minimal effort.

------
pmorici
I've always heard the opposite of what this article is saying; that being, it
is Amazon who is driving the prices low so that they can get the biggest
market share while at the same time making the profit margins look
unattractive to new entrants.

------
hoodoof
Thank god for competition. Moore's law has been missing in action in cloud
computing. Maybe competition will bring it back.

------
DodgyEggplant
But in cloud 3.0 we will may get customer support.

~~~
jpau
Customer support is _expensive_ , as a proportion of fees. That said, I'd be
happy to pay per support ticket (not prompted by a fault).

~~~
DodgyEggplant
Running a serious business on a platform w/o support is not an option. Even
the great Google demands the "customer support" it needs - from government,
states etc. Amazon competes directly on support: their new plans suggest
scheduled "office hours".

[http://aws.amazon.com/activate/office-
hours/](http://aws.amazon.com/activate/office-hours/)

