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As Amazon Mimics Google’s Price Drop, Cloud Computing Grows Up

43 points by ytNumbers 13y ago

cmelbye 13y ago
Has anyone else started investigating Google's cloud offerings as a result of the price drops? We found a few really nice features in their cloud products that will help us out a lot compared to what we have on AWS, and I'm wondering how many others are exploring this.
- tyw 13y ago
  > We found a few really nice features in their cloud products Such a tease. What cool features did you come across?
  - kapilvt 13y ago
    There's quite a few.. super fast networks, network based elb (i assume cause it scales up smoothly and instantly), persistent volumes that can be attached to multiple machines at the same time (read only).. etc.
- giulianob 13y ago
  Yes I have always just used dedicated servers but started looking into cloud. It's looking very attractive but if you use a lot of bandwidth it's still much cheaper to go dedicated.
- morenoh149 13y ago
  I was looking into using google for my next project just out of spite towards amazon. I've used aws only in the past so figured getting familiar with a competitor and giving them some business does some good for the world.
- fizx 13y ago
  Still missing any of the fleet management stuff that AWS gives you. :/ No replacements for auto-scaling groups, IAM, CloudFormation.
awda 13y ago
The article suggests that people (who?) believed AWS was a low-margin business. Why would anyone think that? (And who?)
- deleted 13y ago
  [deleted]
- bertil 13y ago
  Not sure if you are being sarcastic, but the group Amazon and its founder Jeff Bezos have clearly indicated this was their business philosophy. I have to agree that it sounds odd when it comes to something with the cost structure of hosted services, but at a certain scale, it makes sense.
  - qq66 13y ago
    Amazon is very calculating when it comes to operating at low margin. What they mean by running a low margin business is that their operations are capable of running at close to zero margin for almost any product they carry. When they can, they charge high margins and get to have all the extra surplus. When competition thickens up, they reduce the prices to undercut all the other guys. AWS pricing is where this happens the least, by the way, since the prices move so infrequently. In other product categories like DVDs and household items, prices moves up and down almost daily in response to changing market conditions.
- wmf 13y ago
  Maybe because Bezos is always talking about low margins.
  - film42 13y ago
    True, but amazon will intelligently price cut any competitor. Meaning, perhaps the margins aren't always so tiny, but they're prepared should the market require it.
- late2part 13y ago
  Agreed. Any "low margin" business that can do 30% price cuts in one day is not low margin.
r4um 13y ago
Is there a detailed google vs amazon cloud offerings/feature comparison ?
- morenoh149 13y ago
  second that. I want this. closest thing is to open up two tabs with their pricing and compare them that way. But it's not straightforward.
- r4um 13y ago
  RightScale's price comparison http://www.rightscale.com/blog/cloud-cost-analysis/aws-responds-price-cuts-google-vs-aws-pricing-round-2 http://www.rightscale.com/blog/cloud-cost-analysis/aws-respo...
vjz 13y ago
From the article: "what these two sets of massive reductions show is that companies like Amazon were probably charging far higher for their services than it cost to build and run them" It absolutely does not show that. What it shows is that these are commodity services with little differentiation, and the only lever is price.
- hayksaakian 13y ago
  In concrete terms, Amazon and Google are both companies that have run popular services that lost money, or profited very little. Cloud services are neither company's primary offering. Therefore it's reasonable to believe that the list price of their cloud offerings are not at all related to the cost of building and maintaining them.
  - deleted 13y ago
    [deleted]
- hershel 13y ago
  The question is: do you need to be someone with the size/capabilities of Google to compete in this market, or there are many companies that can make that "commodity" ? Because if the answer is the first one, this looks like a good place to be in.
- Aqueous 13y ago
  and how can you reduce the price without operating at a loss? if you left room to reduce prices. so yes, it does show that.
  - eli 13y ago
    Who defines when a price is "far higher" than it could be? And who says they aren't operating at a loss?
  - avalaunch 13y ago
    You're making an assumption that they aren't now operating at a loss. I don't think they are but I wouldn't assume it. It wouldn't be the first time they've operated at a loss in an attempt to corner the market.
jroseattle 13y ago
Will be interesting to see if MSFT drops prices on Azure anytime soon. Given how focused Nadella seems on making Microsoft a competitor in the cloud space, standing pat would seem odd.

43 points by ytNumbers 13y ago

Has anyone else started investigating Google's cloud offerings as a result of the price drops? We found a few really nice features in their cloud products that will help us out a lot compared to what we have on AWS, and I'm wondering how many others are exploring this.

tyw 13y ago
> We found a few really nice features in their cloud products Such a tease. What cool features did you come across?
- kapilvt 13y ago
  There's quite a few.. super fast networks, network based elb (i assume cause it scales up smoothly and instantly), persistent volumes that can be attached to multiple machines at the same time (read only).. etc.
giulianob 13y ago
Yes I have always just used dedicated servers but started looking into cloud. It's looking very attractive but if you use a lot of bandwidth it's still much cheaper to go dedicated.
morenoh149 13y ago
I was looking into using google for my next project just out of spite towards amazon. I've used aws only in the past so figured getting familiar with a competitor and giving them some business does some good for the world.
fizx 13y ago
Still missing any of the fleet management stuff that AWS gives you. :/ No replacements for auto-scaling groups, IAM, CloudFormation.

awda 13y ago

The article suggests that people (who?) believed AWS was a low-margin business. Why would anyone think that? (And who?)

deleted 13y ago
[deleted]
bertil 13y ago
Not sure if you are being sarcastic, but the group Amazon and its founder Jeff Bezos have clearly indicated this was their business philosophy. I have to agree that it sounds odd when it comes to something with the cost structure of hosted services, but at a certain scale, it makes sense.
- qq66 13y ago
  Amazon is very calculating when it comes to operating at low margin. What they mean by running a low margin business is that their operations are capable of running at close to zero margin for almost any product they carry. When they can, they charge high margins and get to have all the extra surplus. When competition thickens up, they reduce the prices to undercut all the other guys. AWS pricing is where this happens the least, by the way, since the prices move so infrequently. In other product categories like DVDs and household items, prices moves up and down almost daily in response to changing market conditions.
wmf 13y ago
Maybe because Bezos is always talking about low margins.
- film42 13y ago
  True, but amazon will intelligently price cut any competitor. Meaning, perhaps the margins aren't always so tiny, but they're prepared should the market require it.
late2part 13y ago
Agreed. Any "low margin" business that can do 30% price cuts in one day is not low margin.

r4um 13y ago

Is there a detailed google vs amazon cloud offerings/feature comparison ?

morenoh149 13y ago
second that. I want this. closest thing is to open up two tabs with their pricing and compare them that way. But it's not straightforward.
r4um 13y ago
RightScale's price comparison http://www.rightscale.com/blog/cloud-cost-analysis/aws-responds-price-cuts-google-vs-aws-pricing-round-2 http://www.rightscale.com/blog/cloud-cost-analysis/aws-respo...

vjz 13y ago

From the article: "what these two sets of massive reductions show is that companies like Amazon were probably charging far higher for their services than it cost to build and run them" It absolutely does not show that. What it shows is that these are commodity services with little differentiation, and the only lever is price.

hayksaakian 13y ago
In concrete terms, Amazon and Google are both companies that have run popular services that lost money, or profited very little. Cloud services are neither company's primary offering. Therefore it's reasonable to believe that the list price of their cloud offerings are not at all related to the cost of building and maintaining them.
- deleted 13y ago
  [deleted]
hershel 13y ago
The question is: do you need to be someone with the size/capabilities of Google to compete in this market, or there are many companies that can make that "commodity" ? Because if the answer is the first one, this looks like a good place to be in.
Aqueous 13y ago
and how can you reduce the price without operating at a loss? if you left room to reduce prices. so yes, it does show that.
- eli 13y ago
  Who defines when a price is "far higher" than it could be? And who says they aren't operating at a loss?
- avalaunch 13y ago
  You're making an assumption that they aren't now operating at a loss. I don't think they are but I wouldn't assume it. It wouldn't be the first time they've operated at a loss in an attempt to corner the market.

jroseattle 13y ago

Will be interesting to see if MSFT drops prices on Azure anytime soon. Given how focused Nadella seems on making Microsoft a competitor in the cloud space, standing pat would seem odd.