Cloud wars: Google and Amazon battle over prices

IDC: Cloud to become an everyday sourcing option for enterprises by 2016

Amazon (Nasdaq: AMZN) and Google (Nasdaq: GOOG) are waging a cloud storage price war that can only benefit companies currently using or considering cloud computing storage.

Google fired the opening salvo early last week, with a 20 percent cut in its standard cloud storage prices and beefed up its cloud platform, including 36 new compute engine instances, durable reduced availability (DRA) storage, object versioning and European data center support.

Amazon returned fire during its AWS re:Invent cloud services conference held in Las Vegas, with a 24 percent to 27 percent price cut for its simple storage service and reduced redundancy storage, as well as the launch of its Amazon Redshift data warehouse service in the cloud.

Google responded with an additional 10 percent price cut, bringing the total price cut to 30 percent for all cloud storage regions and the new DRA storage service.

These price cuts and competition for cloud customers will only accelerate a trend identified by the IDC. The research firm is predicting cloud services will become an everyday sourcing option for chief information officers and line of business managers by 2016.

In addition, market developments are prompting medium and large enterprises toward private cloud deployment to deliver more flexible business services at a reduced cost. For critical applications, enterprises require a secure private cloud, particularly enterprises in regulated industries.

"Economies of scale are a hallmark of the cloud marketplace, demonstrated by the growing concentration of physical IT infrastructure spending into a narrower group of service providers," observed Chris Morris, IDC's lead analyst for cloud services in Asia-Pacific region except for Japan.

With the most recent price cuts, competition is definitely heating up in the cloud services market. Enterprises will be the ultimate beneficiaries.

For more:
- see Google's blog
- check out Amazon's price cut and Redshift announcements
- read IDC's cloud predictions

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