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Does someone know why Google Cloud can afford to be so much cheaper compared to AWS? Are the costs to Amazon for AWS so much higher than the costs to Google for

Does someone know why Google Cloud can afford to be so much cheaper compared to AWS? Are the costs to Amazon for AWS so much higher than the costs to Google for Google Cloud? Why?

notyourwork 10y ago
My guess is economics are trying to steal AWS business. Low pricing will draw a % of AWS customers over to GCE and the prices will balance out. Frankly I am more interested in Google's support quality compared to AWS. I don't have any experience with Google but I know Amazon is founded on the premise of customer experience which carries into their support. How is google's support?
- StreamBright 10y ago
  I am not familiar with GCP support but with their product support. Once I bought a device from Google and it broke on the first day. The device was completely dead, did not even turn on. When I engaged their support and explained the situation to the customer representative she kept asking me which light is on even though I explained to her 10 times that the device is completely dead. I was lucky because I bought the device through Amazon. I visited the website clicked on the dead device needs to be replaced button and in 10 minutes the replacement was on the way to my home. I do not want to draw any conclusion here but when it comes to which company gets my money decision I always prefer Amazon. The following applies to customer trust too: "It takes a lifetime to build a good reputation, but you can lose it in a minute." ― Will Rogers
jonathanyc 10y ago
It's Google using their typical strategy: spend lots of advertising cash to develop and then provide something for free / less than competitors, with the goal of pulling you into their ecosystem. Under the Obama administration we didn't see any antitrust/antidumping actions because of how much Google managed to embed themselves into the administration. Don't know if it will change. EDIT: fixed a typo
- treehau5 10y ago
  Your latter point is not really a point at all. There is vendor lock in at every corner with AWS. The big 3 all do this. In my view, there's really only two things that can reduce cost enough to make a difference: 1. Reducing energy consumption, 2. Reducing drive / component failure. I believe Google may be better at both of those than Amazon.
reitanqild 10y ago
IIRC I think I have seen some people here argue it is because they have close to no customer support. From Amazon however I have even heard about them forgive bills where the customer was really to blame. All this is hearsay though and I don't think Amazon does this out of the goodness of Jeffs heart but as long as enough people think this is how it works it might be part of why people will use AWS even if it is more expensive.
- vgt 10y ago
  Our support folks can comment here, but I would disagree with that point. Our support org is massive, there are varying tiers levels of Support SCE/CRE/SRE/SWE-level of support, all the way up to [0]. I'll also comment that Google's Eng/PM org is very engaged. It's not unusual for an engineer in charge of a service to help resolve a customer an issue. [0] https://cloudplatform.googleblog.com/2016/10/introducing-a-new-era-of-customer-support-Google-Customer-Reliability-Engineering.html https://cloudplatform.googleblog.com/2016/10/introducing-a-n... (work on Google Cloud but do not get paid to post here)
  - kuschku 10y ago
    > It's not unusual for an engineer in charge of a service to help resolve a customer an issue. This is not related to Google Cloud, but to GSuite: Or, if you get an engineer on the phone, through the support number, they just insult you, and hang up on you, as has happened to me once (back when the free tier of GSuite was still a thing).
    - vgt 10y ago
      That's unacceptable anywhere. I know Google support spends gobs of time quantifying customer success and happiness, gets measured and rewarded by these numbers. Nature of support anywhere is that sadly you'll always have some folks with a bad experience, all you can do is try to make it right by all.
  - StreamBright 10y ago
    I am not sure that you can really use the size of your support org when talking about customer experience. Why don't you come up with a 3rd party customer survey about how your customers are happy with you compare to Amazon? If you are absolutely certain that your support is great it would prove the point.
fabian2k 10y ago
I'd suspect that AWS has a pretty healthy margin on their instances, and Google might be willing to accept a much lower margin to gain marketshare.
Nacraile 10y ago
AWS is actually a pretty high margin business (~25% operating margin is public, GM is not publicly known but good guesswork puts it ~50%). So, there's some hard data showing a lot of room for price competition. If you'll allow me to get a bit more wibbly: I've been an engineer at both companies, and from a technical perspective, Google is much better at this stuff. In order to provide their own services, they've been operating at much larger scale for much longer than anyone else. There's a pretty long record of the new hot thing in the industry being something Google's been doing on the order of a decade. The basic deficit in experience is exacerbated by Amazon's relatively poor retention of its best talent. Putting all of this together, it is my expectation that Google be able to build better services faster, and to operate them more efficiently. AWS started with a massive first mover advantage, but my expectation is that in the long run Google will have little difficulty closing that gap and pulling ahead, should it wish to.
- justicezyx 10y ago
  > AWS is actually a pretty high margin business Correct, see how much profit AWS contributed to Amazon in the past quarters. > I've been an engineer at both companies Same here, so I offer my perspective. > Google is much better at this stuff Not much, but noticeably better across the board. Overall it's substantially better when combine everything together. But as others point out, the technical superiority does not account 100% of the quality of product offering. Being in 2 companies, I think you have similar experiences. Otherwise, GCP should already eat AWS in 2012. > Google will have little difficulty closing that gap and pulling ahead I think so. But my expectation is that Google needs operate Cloud as its top priority, and treat AWS as a tougher competitor than MSFT in the search/browser war. The thing is, that Cloud is a much much bigger market than internet ads. The race will be long and difficult to predict. Amazon is a much more formidable competitor than MSFT. They have proven to be the best in retaining customer and build a brand. They are also extremely fast in execution. And they are not afraid to try crazy ideas and abandon them if proven wrong.
  - mattnewton 10y ago
    Plus they have a real customer service culture, something Google seems allergic to. Edit: posts further down from mine seem to suggest my sentiment is outdated and Google takes cloud support very seriously in their teirs. https://cloud.google.com/support/ https://cloud.google.com/support/
SEJeff 10y ago
One of the things I've heard (from googlers) is that by using KVM as the underlying hypervisor, they do live migration much better than Amazon. Using that, they can live migrate applications to the same servers and bin-pack much better. This allows them to squeeze more jobs onto the same hardware by leveraging their already dominant lead in machine learning to predict workloads. Basically, they can do a better job than Amazon predicting current and future workloads. As a result, they can more efficiently place workloads and literally do more with equal or less hardware. That and the fact that they have been building their own hardware better means their hardware is also very likely more advanced. Those together mean they can do the same thing for cheaper and still turn a profit. Amazon optimizes for doing something first and doing the most. Google optimizes for doing things smarter and as a result often does them cheaper. However, it also means that Google provides massively fewer services than Amazon.
jacques_chester 10y ago
> Does someone know why Google Cloud can afford to be so much cheaper compared to AWS? They have better hardware utilisation and a lot of their infrastructure was fully-depreciated before they opened GCP. Unlike AWS, Google couldn't design systems assuming a customer would bear the price of any moderate inefficiencies. So they've had more design pressure on cost from the beginning. I also suspect their cost of networking is much lower -- they own their own fibre network and a lot of it will also be fully-depreciated.
honkhonkpants 10y ago
The same reason that Google could launch Gmail with 100x as much free storage as Hotmail: Google's physical infrastructure is dramatically less expensive than everyone else's.
herbst 10y ago
AWS is expensive as fuck. If i move the structure of one of my websites to AWS i would get my 99.99% uptime instead of boring 99% but it would cost avout $400 dollars instead of about $50. But sure thats missing the fact that i hafs to self manage right now.

Does someone know why Google Cloud can afford to be so much cheaper compared to AWS? Are the costs to Amazon for AWS so much higher than the costs to Google for Google Cloud? Why?

notyourwork 10y ago

My guess is economics are trying to steal AWS business. Low pricing will draw a % of AWS customers over to GCE and the prices will balance out. Frankly I am more interested in Google's support quality compared to AWS. I don't have any experience with Google but I know Amazon is founded on the premise of customer experience which carries into their support. How is google's support?

StreamBright 10y ago
I am not familiar with GCP support but with their product support. Once I bought a device from Google and it broke on the first day. The device was completely dead, did not even turn on. When I engaged their support and explained the situation to the customer representative she kept asking me which light is on even though I explained to her 10 times that the device is completely dead. I was lucky because I bought the device through Amazon. I visited the website clicked on the dead device needs to be replaced button and in 10 minutes the replacement was on the way to my home. I do not want to draw any conclusion here but when it comes to which company gets my money decision I always prefer Amazon. The following applies to customer trust too: "It takes a lifetime to build a good reputation, but you can lose it in a minute." ― Will Rogers

jonathanyc 10y ago

It's Google using their typical strategy: spend lots of advertising cash to develop and then provide something for free / less than competitors, with the goal of pulling you into their ecosystem. Under the Obama administration we didn't see any antitrust/antidumping actions because of how much Google managed to embed themselves into the administration. Don't know if it will change. EDIT: fixed a typo

treehau5 10y ago
Your latter point is not really a point at all. There is vendor lock in at every corner with AWS. The big 3 all do this. In my view, there's really only two things that can reduce cost enough to make a difference: 1. Reducing energy consumption, 2. Reducing drive / component failure. I believe Google may be better at both of those than Amazon.

reitanqild 10y ago

IIRC I think I have seen some people here argue it is because they have close to no customer support. From Amazon however I have even heard about them forgive bills where the customer was really to blame. All this is hearsay though and I don't think Amazon does this out of the goodness of Jeffs heart but as long as enough people think this is how it works it might be part of why people will use AWS even if it is more expensive.

vgt 10y ago
Our support folks can comment here, but I would disagree with that point. Our support org is massive, there are varying tiers levels of Support SCE/CRE/SRE/SWE-level of support, all the way up to [0]. I'll also comment that Google's Eng/PM org is very engaged. It's not unusual for an engineer in charge of a service to help resolve a customer an issue. [0] https://cloudplatform.googleblog.com/2016/10/introducing-a-new-era-of-customer-support-Google-Customer-Reliability-Engineering.html https://cloudplatform.googleblog.com/2016/10/introducing-a-n... (work on Google Cloud but do not get paid to post here)
- kuschku 10y ago
  > It's not unusual for an engineer in charge of a service to help resolve a customer an issue. This is not related to Google Cloud, but to GSuite: Or, if you get an engineer on the phone, through the support number, they just insult you, and hang up on you, as has happened to me once (back when the free tier of GSuite was still a thing).
  - vgt 10y ago
    That's unacceptable anywhere. I know Google support spends gobs of time quantifying customer success and happiness, gets measured and rewarded by these numbers. Nature of support anywhere is that sadly you'll always have some folks with a bad experience, all you can do is try to make it right by all.
- StreamBright 10y ago
  I am not sure that you can really use the size of your support org when talking about customer experience. Why don't you come up with a 3rd party customer survey about how your customers are happy with you compare to Amazon? If you are absolutely certain that your support is great it would prove the point.

fabian2k 10y ago

I'd suspect that AWS has a pretty healthy margin on their instances, and Google might be willing to accept a much lower margin to gain marketshare.

Nacraile 10y ago

AWS is actually a pretty high margin business (~25% operating margin is public, GM is not publicly known but good guesswork puts it ~50%). So, there's some hard data showing a lot of room for price competition. If you'll allow me to get a bit more wibbly: I've been an engineer at both companies, and from a technical perspective, Google is much better at this stuff. In order to provide their own services, they've been operating at much larger scale for much longer than anyone else. There's a pretty long record of the new hot thing in the industry being something Google's been doing on the order of a decade. The basic deficit in experience is exacerbated by Amazon's relatively poor retention of its best talent. Putting all of this together, it is my expectation that Google be able to build better services faster, and to operate them more efficiently. AWS started with a massive first mover advantage, but my expectation is that in the long run Google will have little difficulty closing that gap and pulling ahead, should it wish to.

justicezyx 10y ago
> AWS is actually a pretty high margin business Correct, see how much profit AWS contributed to Amazon in the past quarters. > I've been an engineer at both companies Same here, so I offer my perspective. > Google is much better at this stuff Not much, but noticeably better across the board. Overall it's substantially better when combine everything together. But as others point out, the technical superiority does not account 100% of the quality of product offering. Being in 2 companies, I think you have similar experiences. Otherwise, GCP should already eat AWS in 2012. > Google will have little difficulty closing that gap and pulling ahead I think so. But my expectation is that Google needs operate Cloud as its top priority, and treat AWS as a tougher competitor than MSFT in the search/browser war. The thing is, that Cloud is a much much bigger market than internet ads. The race will be long and difficult to predict. Amazon is a much more formidable competitor than MSFT. They have proven to be the best in retaining customer and build a brand. They are also extremely fast in execution. And they are not afraid to try crazy ideas and abandon them if proven wrong.
- mattnewton 10y ago
  Plus they have a real customer service culture, something Google seems allergic to. Edit: posts further down from mine seem to suggest my sentiment is outdated and Google takes cloud support very seriously in their teirs. https://cloud.google.com/support/ https://cloud.google.com/support/

SEJeff 10y ago

One of the things I've heard (from googlers) is that by using KVM as the underlying hypervisor, they do live migration much better than Amazon. Using that, they can live migrate applications to the same servers and bin-pack much better. This allows them to squeeze more jobs onto the same hardware by leveraging their already dominant lead in machine learning to predict workloads. Basically, they can do a better job than Amazon predicting current and future workloads. As a result, they can more efficiently place workloads and literally do more with equal or less hardware. That and the fact that they have been building their own hardware better means their hardware is also very likely more advanced. Those together mean they can do the same thing for cheaper and still turn a profit. Amazon optimizes for doing something first and doing the most. Google optimizes for doing things smarter and as a result often does them cheaper. However, it also means that Google provides massively fewer services than Amazon.

jacques_chester 10y ago

> Does someone know why Google Cloud can afford to be so much cheaper compared to AWS? They have better hardware utilisation and a lot of their infrastructure was fully-depreciated before they opened GCP. Unlike AWS, Google couldn't design systems assuming a customer would bear the price of any moderate inefficiencies. So they've had more design pressure on cost from the beginning. I also suspect their cost of networking is much lower -- they own their own fibre network and a lot of it will also be fully-depreciated.

honkhonkpants 10y ago

The same reason that Google could launch Gmail with 100x as much free storage as Hotmail: Google's physical infrastructure is dramatically less expensive than everyone else's.

herbst 10y ago

AWS is expensive as fuck. If i move the structure of one of my websites to AWS i would get my 99.99% uptime instead of boring 99% but it would cost avout $400 dollars instead of about $50. But sure thats missing the fact that i hafs to self manage right now.