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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
It's quite possible that Amazon and/or Google is prepared to operate their cloud (or some parts of their cloud) at a loss, or at least at zero margins. Look at Amazon's financial statements and you'll find they operate almost all their business on zero margin.
The reasons for that differ - Amazon optimises for growth and market domination over profits, while Google doesn't want to see Amazon control the entire cloud market.
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.
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[ 3.1 ms ] story [ 66.0 ms ] threadSuch a tease. What cool features did you come across?
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.
It absolutely does not show that. What it shows is that these are commodity services with little differentiation, and the only lever is price.
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.
Because if the answer is the first one, this looks like a good place to be in.
The reasons for that differ - Amazon optimises for growth and market domination over profits, while Google doesn't want to see Amazon control the entire cloud market.