Google Drops Compute Engine Prices 10 Percent Across Instances, Regions

Google surprised its burgeoning base of infrastructure cloud users Wednesday with an across-the-board reduction in Compute Engine prices of about 10 percent, a move seen as yet another escalation of the cloud wars.

At Atmosphere Live, a webcast event intended to woo businesses to its recently rebranded enterprise cloud offering now called Google for Work, Urs Hölzle, senior vice president for technical infrastructure, told online viewers that Moore's Law enabled the search engine giant to once again slash rates.

The reductions are immediately in effect for all Compute Engine instances and in all regions, a move that can reasonably be expected to trigger responsive price cuts from Google rivals, notably Amazon Web Services and Microsoft Azure.

[ Related: Google Dumps 'Enterprise' Branding, Renames Business Products 'Google For Work']

"These cuts are a result of increased efficiency in our data centers as well as falling hardware costs, allowing us to pass on lower prices to our customers," Holzle wrote in the Google Cloud blog.

The move further helps developers realize the promise of cloud computing, he said, "by providing on-demand access to world-class technology at an affordable price."

To emphasize Google's commitment to reducing prices as hardware get cheaper, Hölzle reminded customers that only in March Google simplified its pricing schedule and made drastic reductions of more than 30 percent percent for all Compute Engine instances and even bigger savings for users of App Engine, Storage and Big Query.

Google's rapidly expanding network of channel partners, excited about Google's renewed drive to win over big business, appeared pleased to hear they could pass down further savings.

"We are starting to see some public results of Google's investment in cloud platform," David Hoff, SVP of technology at Cloud Sherpas, told CRN. "The price cuts are really a result of both Moore's law and Google's amazing economy of scale."

Hoff noted Google has, on average, invested $2 billion per quarter, according to a review of its financials, on data centers and technology infrastructure.

"Google invests more in one quarter than most companies spend all year. In the process of building some of the largest compute platforms in the world, they have pioneered technologies like containerization that bring unprecedented levels of efficiency and agility to their compute infrastructure," he said. "This containerization isn't just a few percent more efficient than legacy virtualization technologies; in many third-party tests, it can provide the same performance with half the resources of a traditional approach."

But one Google reseller, Lane Campbell, board member of Chicago-based Durmic Consulting, made the point to CRN that lower and lower prices isn't all it will take for Google to expand its share of the competitive public cloud marketplace.

"They seem to be focused on out-pricing Amazon for a stable compute environment," Campbell told CRN.

That, in itself, won't allow Google to drastically cut into the industry leader's overwhelming market share, he added.

"I would hope to see Google add more features to create more value over simply waging a price war," Campbell said.

Amazon has the most complete solution with EC2, Route53 and S3 among other services, he said.

"Google simply has the compute functionality in this offering, which is a shame because they are big enough to be a true contender in this space," Campbell said.

PUBLISHED OCT. 1, 2014