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Google cuts Compute Engine costs in ongoing cloud price war

Thu 2 Oct 2014

Google announced yesterday its plans to significantly reduce the cost of its cloud services, fuelling yet again the ongoing pricing war between rival providers, such as Amazon Web Services and Microsoft Azure.

The deal, revealed over Google’s Atmosphere Live webcast, consists of a 10 per cent reduction in price for all its Compute Engine instances with immediate effect.

According to Google senior vice president of Technical Infrastructure, Urs Hölzle, the latest cuts were prompted by “increased efficiency in our data centres as well as falling hardware costs.”

Google announced its first round of cost reductions in March this year at its Cloud Platform Live in San Francisco. These included a price cut of 32 percent for Compute Engine, and an 85 percent reduction for its BigQuery data analysis service.

After the Google announcement in March, AWS revealed similar cuts to the price of its services, and Microsoft promptly followed suit.

Last Thursday Microsoft announced that it would reduce the costs for some of its Azure instances by 27 percent or more, and AWS is expected to mirror Google’s current price cut – standing by its promise to be the first to match any reductions made by the Mountain View-based company.

Google has been working on aligning its cloud strategy with its Moore’s Law-esque prediction that cloud will experience major and continuing price drops, in a similar fashion to hardware.

“We believe that compute — the core of any cloud workload — should be simple and fast to provision, scale without effort, and be priced in accordance with Moore’s Law,” said Hölzle.

Following Hölzle, Sundar Pichair, Google senior vice president for Android, Chrome and Apps, announced the success of Google Drive which now counts over 240mn active users – an increase of 50mn in a single quarter, from 190mn active users in June. A Google Drive for Education also debuted yesterday and is expected to boost active user numbers over Google’s 300mn milestone target.

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