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I worked at a company that heavily used the maps API in 2018. The 1,400% price hike really was an eye opener. It wasn't just the money involved, which was large
by alasdair_ 6y ago
I worked at a company that heavily used the maps API in 2018. The 1,400% price hike really was an eye opener. It wasn't just the money involved, which was large, but the fact that it came so suddenly and with so much magnitude.
Google's choice to bump these prices made me realize that they could do the same thing with their compute cloud pricing or other APIs, again with little notice. That, in turn, led to the realization that we needed to remove our reliance on Google's entire stack, and quickly, or we'd be in a terrible bargaining position later.
This one choice by the maps team likely cost Google significantly in the medium to long term, if any other companies realized the same things we did.
- maxerickson 6y agoMapbox responded to Google raising prices by raising their prices. Is it likely that Azure and Amazon would do similar if they raised prices on GCP?
- MichaelZuo 6y agoDid all of the major providers raise their prices after?
- arafsheikh 6y agoCurious to know if AWS has ever hiked the price of any of its services.
- cldellow 6y agoIn 11 years of using it, I've never seen AWS increase the price for a service whose cost inputs they controlled entirely. It can happen, though. They increased AWS Pinpoint costs because their cost to send SMSes in India increased by 25% due to a regulatory action that increased the price for all SMS traffic in India. Often, AWS's prices are _really_ high for new services. I think this is useful for two reasons: it ensures your early adopters are those who get the most value, and it gives you a big buffer when discovering how much it actually costs to operate. This usually guarantees that prices have only one way to go. For example, AWS IoT Device Management had a 90% price cut after it was introduced.
- PoignardAzur 6y ago> Often, AWS's prices are _really_ high for new services. I think this is useful for two reasons: it ensures your early adopters are those who get the most value, and it gives you a big buffer when discovering how much it actually costs to operate. I've thought about this concept a few times lately. Like, I get the impression that a savvy business, when starting a new product with very little competition, should start with prices as bad and guarantees as low as they can get away with, because they can always improve their offer later, whereas going the other way runs into loss aversion and consumer alienation. Eg it's better to start at 40$/month and lower to 30$/month after a year than to start at 20$/month and get a lot of angry users when you realize you need 30 to break even. I wonder if there's a name for that concept.
- supertrope 6y agoAnchoring
- ayewo 6y agoThe name of the concept is price skimming. The rationale mentioned by the parent is also stated in its Wikipedia entry [1]. Many may not know that behind the scenes, Amazon hires economists just like their big tech peers MS, Google. [1] https://en.wikipedia.org/wiki/Price_skimming#Reasons_for_price_skimming https://en.wikipedia.org/wiki/Price_skimming#Reasons_for_pri...
- happymellon 6y agoNo, they have stopped reducing the prices of existing services once they become depricated, so they effectively become more expensive compared to other services but never increased. Although reselling other products, such as RDS Oracle or MSSQL could potentially have increased if the licences fees went up. But I don't think that is what you are referring to.
- marcinzm 6y agoGoogle was the dominant provider of maps I'm guessing by a large margin. GCP is not the dominant provider of cloud services (they're third or distant third).
- d1zzy 6y agoSo that means it should be safer to rely on GCP (or in general on services where Google is not dominant) than something like Maps where it is dominant.
- marcinzm 6y agoUnless GCP is priced lower than competitors in which case their prices may rise to match them like with hosted kubernetes.
- maxerickson 6y agoYes, that's my point. There's clearly competition in compute. That Mapbox raised prices after Google did points to maps not being terribly cut throat (I think Mapbox got lots of low value load when Google upped prices, load that they then subsequently decided to shed by upping prices). Other map data providers were already more expensive than Google.
- oblio 6y agoI think they're fourth and falling: AWS, Azure, Ali, GCP. I think the IBM cloud is gaining on GCP. Worse than that, every 1 position drop market share halves: ~50%, ~25%, 12%, 6%.
- stiray 6y ago> Google's choice to bump these prices made me realize that they could do the same thing with their compute cloud pricing or other APIs, again with little notice. That, in turn, led to the realization that we needed to remove our reliance on Google's entire stack, and quickly, or we'd be in a terrible bargaining position later. Yes. You are right. The whole cloud deal is a try to rule out on premise infrastructure and once it is gone and everyone is dependent on it (due to lost of knowledge, and for cloud providers ideally when hardware vendors are no longer selling hardware to non cloud entities) harvest the dependent businesses left at their mercy and charge dearly (including for all the years before that). It is actually not even a complicated plan but it is staggering how many people are putting cloth over their eyes.
- jimkleiber 6y agoThese two comments make me see SaaS more like paying rent for housing: If we become fully dependent on a service (shelter) and then the provider (landlord) jacks up the price, we may be quickly forced to switch services (homes) or be out of business (homeless).
- thesz 6y agoDo not forget that in the case of cloud services you have to pay "landlord" for the stuff you move (bandwidth and volume needed to migration).
- jimkleiber 6y agoHa, good point, perhaps that'd be like paying your landlord for utilities like water or electricity usage, but could also be paying for every time you have guests visit the house or you go up and down the stairs.
- franklampard 6y agoI like this analogy. I think a good idea is to sign a long term (1 year to multiple years) contract with cloud providers.
- wpietri 6y agoGoogle's fundamental relationship with users is statistical, and I think it shows. They're very good at optimizing metrics; their search, for example has remained the leader 20+ years on. In that world, if you lose a few users or give a bad experience, well, there are plenty more where those came from, and the ones who leave will often come back. I think they mistakenly bring that attitude to their consumer businesses, though. The stories of bad customer experiences are legion. Like you, I've learned that I can't really trust them. Which is true of all companies, of course, but it's different with Google. Amazon is even more rapacious, but I trust them to be long-term greedy, to not shoot themselves in the foot with some short-sighted action. For all their flaws, they understand that customer relationships have long-term value.
- gofreddygo 6y agoenterprise and consumer markets are so different. The same management leading on both fronts is unheard of and very unlikely at larger orgs. At Google's scale they are optimized and oriented for the consumer market with their horrendous pricing strategies, poor customer service, negligent backward compatibility and pseudo-monopolistic products and offerings. As a consumer, I can live with the lack of trust. From a business perspective I cannot live with that.
- notyourwork 6y ago> Amazon is even more rapacious, In what way? It seems a bit like stone throwing to immediately toss another company into the conversation without providing some anecdote.
- danielheath 6y agoI mean, at a minimum, their habit of using customer data from their platform businesses to inform development of their own competing products is pretty sketchy.
- notyourwork 6y agoAny store that uses a rewards, loyalty card or phone number when you checkout does the same. I'm not sure why Amazon is the bad guy when grocery stores have been distributing private brands of mainstream products and shopper loyalty has been used to optimize revenue streams. Amazon does it on a bigger scale, not sure the scale makes it right or wrong though.
- jimbob45 6y ago> This one choice by the maps team Probably wasn’t the maps team that made the decision. Let’s not confuse the ace team that put out a leading-class product with their idiot management.
- wayne 6y agoI went through the same journey and never built on Google Map APIs ever again. The unreliability hurt more than the money. There's something pure about using a capitalistic API (e.g. AWS, Stripe, Twilio) where you know they're making a good buck off your usage, whereas with Google it felt like a side business that they'd change on a whim. I feel similarly about brokerage accounts that are upfront about charging a transaction fee or checking accounts that have a clear minimum or fee. When it's "free", I'm always scared that I'll end up paying another way and what I'm relying on will get washed away.
- mullingitover 6y ago> Google's choice to bump these prices made me realize that they could do the same thing with their compute cloud pricing At least in the cloud computing space, Google is an also-ran thanks to Amazon. They were able to play this game with Maps because they didn't have a healthy competitor. If they screwed with pricing as a distant second place competitor they'd be toast. > This one choice by the maps team likely cost Google significantly in the medium to long term, if any other companies realized the same things we did. It definitely did. What they did with Maps is exactly why I would never, ever consider running anything critical with Google.
- simonw 6y ago"This one choice by the maps team likely cost Google significantly in the medium to long term" Reminiscent of the Google Reader thing. Google Reader was used by, in global terms, a tiny number of people. But today those same people get to make purchasing decisions at a large array of well funded companies, and they're still bitter about Reader shutting down.
- nikau 6y agoI'm still dirty on goggle for announcing retirement of cloud print a few weeks after I got it all set up.
- niuzeta 6y agoCan't agree more.
- draw_down 6y agoStill bitter... and still using Gmail and search and maps and whatever else. I dunno guys, we don’t have to like it but it sure seems like they know what they’re doing over there in Mountain View.
- mcintyre1994 6y agoThis really does seem like a shortsighted move given they’re seemingly pretty serious about Google Cloud, and their Maps Platform is apparently part of that: https://cloud.google.com/maps-platform https://cloud.google.com/maps-platform AFAIK AWS has never increased their prices for anything ever, Google Cloud once increased the price of a service by 1400%. That takes Google Cloud out of consideration for me for anything I don’t want to have to or can’t (because of vendor lock-in) move to another service with very little notice.
- drawkbox 6y agoStill raw from a gaming platform we built for progress/matchup on App Engine (GAE) early on in 2011 for a popular racing matchup game. We chose App Engine due to flexibility, scaling and price. One day Google increased prices and our costs went up x5-x10 on AppEngine [1][2]. We then had to move to AWS over the next few weeks early on in launch. It caused push back on other projects and was generally a bad time that wasn't necessary. That isn't the way to build trust and we have used AWS and now Azure more than Google Cloud for this reason in the decade since. Google has great tools, but you simply cannot do shock pricing on the cloud, it is the biggest fear of everyone that uses the cloud or has to recommend it. Google made us look bad by choosing them over AWS, later we also use Azure. We like to build our systems for horizontal scaling, on cheaper machines, we weren't even doing much but it was suddenly out of budget and left everyone feeling burned by Google. I love Google and their tools, but they have to be careful with the rug pulling and knee capping people that choose large projects to develop on their products and platforms. Don't make people look bad for choosing your product and especially don't surprise people with pricing or dropping products. If it was a better planned price increase we could have taken time to move off more slowly or even optimized to run on it, but since it was so sudden it was shocking. Since that moment they have lost lots of projects to Google Cloud that would have gone there. We literally never expected it because AWS was a force, Azure was still new, and we thought Google would be price competitive to AWS and Azure while looking to gain customers trust as cloud products were something that didn't seem like you'd want to do any drastic changes to customers as they can be long term customers if things go well. [1] https://www.theregister.com/2011/09/02/google_app_engine_users_on_pricing_change/ https://www.theregister.com/2011/09/02/google_app_engine_use... [2] https://www.infoq.com/news/2011/09/app-engine-price-hike/ https://www.infoq.com/news/2011/09/app-engine-price-hike/
- dwild 6y agoI means it's always good to reduce reliance on anything, so I won't argue against that, but I won't agree much with your reasoning. The cost we were actually paying on the Google Maps API was hidden. The cost was mostly paid using user data and advertising. As a matter of fact, the API is still free on smartphone ;). They just realized that it wasn't worth it to get that data on the web and thus increased the cost to the true price. The fact that there was already some competition to Google Maps which was much more expensive tells a lot. That's not something that's going to happen on the cloud though. You pay the real cost, they aren't monetizing it from a side channel (though they may profit a tiny bit on the side by lowering their infrastructure cost, it's not the goal and I wouldn't be surprised if they didn't used their own cloud offering that much). The profit come from the price, not the user data. It wouldn't be a good idea for them to increased theses prices, as competition exist/can exist, and they would just hurt themselves on the long term.
- Strom 6y agoUnexpected pricing changes have already happened to Google Cloud offerings in the past. Google completely redesigned their App Engine pricing scheme in 2011. In practice this meant a 65x price increase for one of my small services. [1] Among the changes was that the 2008-2011 pricing was based on CPU usage, while in 2011 they stopped charging for CPU usage and instead introduced a slew of other pricing metrics, including the classic VM instance idle time. While the pricing changes frustrated me, they did not drive me away. What ended up having a much bigger impact was that Google just deprecated everything. Some parts of classic App Engine still run in legacy mode, but get no updates and instead you get constant notifications that you should rewrite your app to fit the new Google Cloud model. -- [1] https://www.kaurkuut.com/blog/google-app-engine-is-a-classic-bait-and-switch-scam https://www.kaurkuut.com/blog/google-app-engine-is-a-classic...
- mrjin 6y agoThat's exactly what you should expect when anything comes into monopoly. When you have no alternatives, any price could be the best offer for you. For the same reason, when I have to use cloud, I would try to avoid anything that deeply binding to a particular vendor by using IaaS or PaaS so that we can bail out when something went sour.
- dotancohen 6y ago> That, in turn, led to the realization that we needed to > remove our reliance on Google's entire stack, and quickly > or we'd be in a terrible bargaining position later. Always keep deployments vendor-agnostic. I'm very very happy on AWS, but I could literally deploy to Google Cloud or Rackspace in an hour if need be. I run my own Linux servers, Elasticsearch and RabbitMQ servers, and though I do use and love RDS, I could just as easily move to a self-installed MySQL server. And I don't use the AWS DNS services, rather I trust that only with my registrar who I am very very happy with.