Unique Proposition: Cloud Price Wars Rage, But The Real Battle Is For Differentiation


In case you haven't heard, the cloud price war everyone has been expecting to happen has finally begun. Google, Amazon Web Services and Microsoft all dramatically cut the cost of cloud-based servers, storage and other services in late March, and they're expected to continue cutting prices over time as they learn how to run cloud data centers with ever-increasing efficiency.

This latest round of price cuts was notable for both the size of the cuts and the narrow time frame in which they took place. First, Google cut pricing for its Compute Engine Infrastructure-as-a-Service by 32 percent and storage by 68 percent for most users. A day later, AWS slashed pricing for its cloud servers by up to 40 percent and cloud storage by up to 65 percent. A few days after that, Microsoft said it's introducing a new entry-level cloud server offering that will be up to 27 percent cheaper than its current lowest service tier.

Across the tech industry, the price cuts are deemed a positive development because they're likely to get more organizations purchasing IT services in the cloud and even putting more of their business operations there. But while partners that work with Google, Amazon and Microsoft agree that pricing is important, many say the real battle in the cloud is for differentiation.

[Related: Who's Steering The Cloud Strategies At Amazon, Google And Microsoft?]

"Most companies in the partner community, and their customers, don't care about the pricing changes," said David Powell, vice president of managed services for TekLinks, a Microsoft partner in Birmingham, Ala. "This is a battle between big companies, and customer demand doesn't move from one to another based on these price cuts."

While price cuts and unique pricing models are part of that, they're not the only part. According to partners that work with the three vendors, the cloud game is going to be more about offering features and technologies that competitors can't mimic, and the ability to run cloud services with a minimum of downtime.

CRN spoke to more than a dozen partners working with Google, Microsoft and Amazon to get their take on what makes their vendor partner's cloud unique. Here's what they had to say.

Google's Cloud: Heavy-Duty Tech Plus A New Pricing Model

Google is setting its cloud apart from the competition by digging deep into its well of technical know-how, which isn't surprising considering that Google's lineup of star engineers is the computer science equivalent of the 1927 New York Yankees' "Murderers' Row."

At a cloud event in late March, the very first feature Google demonstrated was "live migration," which allows a running virtual machine to be moved from one physical server to another without shutting it down, which is useful when organizations need to maintain or upgrade servers.

Being able to switch a live system from one data center to another, without the user being aware of any issues, is core to what Google does with its Google Apps instances, Grant McCarthy, principal consultant at Onix Networking, a Google partner in Lakewood, Ohio, told CRN. "It's no surprise they can offer the same thing via their Google Compute Engine to application development efforts," McCarthy said.

NEXT: The Google Advantage


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