Google Vs. Amazon: How Do Their Cloud Compute Prices Stack Up?

It's been a while now since a good price war flared up in the public cloud market.

But Google may have fired the opening salvo this week when it slashed prices on multiple types of compute instances, some by 30 percent. Google is now significantly cheaper than rival AWS for most use cases, according to a new report published by RightScale, a developer of software for managing IaaS platforms based in Santa Barbara, Calif.

In light of Google's first Compute Engine price reduction in seven months, RightScale crunched the numbers to take a deeper look at how Google and Amazon Web Services actually stack up price-wise.

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"This week's price cut by Google is another strategic move in the Google vs. AWS pricing battle that ultimately benefits cloud consumers," the RightScale report, authored by Kim Weins, vice president of marketing, stated.

Weins told CRN she would be surprised if AWS didn't respond by dropping its own prices sometime this year, especially now that the world knows how profitable the business is and how fast it's growing.

It's been more than a year since AWS delivered significant across-the-board reductions in compute prices, opting to ignore the last two Google cuts. Instead, AWS has aimed to differentiate its cloud by shifting its message to focus on the broad set of features available on the platform, Weins said.

But by standing idle once again, Amazon could be playing into Google's hands, she observed.

"With this price cut Google has likely created enough of a price differential to get people to sit up, take notice, and try Google Cloud Platform," she told CRN.

It's not always easy to compare cloud prices apples to apples. When stacking up clouds across multiple instance types, pricing plans, payment options and resources to be optimized, things can get messy.

For its analysis, RightScale first looked at the costs of on-demand computing, billed by the hour, for standard, high-memory and high-CPU instances.

Across those comparable instances, Google is roughly 28 percent cheaper, it concluded.

The picture quickly gets more complicated, however, once you start considering different packages like Amazon's one- or three-year Reserved Instances. Or Google's Typical and 100% Sustained Use plans that discount workloads using resources more consistently.

But the cost of a standard Google virtual machine is now "significantly lower" than one from Amazon, according to RightScale, unless you're willing to lock in and pay upfront for an AWS three-year Reserved Instance.

Those, compared with Google's 100% Sustained-Use pricing, are 34 percent cheaper for standard and high-CPU instances, and 43 percent cheaper for high-memory instances. They're an even better bargain when comparing cost against the RAM they offer users.

But AWS Reserved Instances aren't an apples-to-apples comparison, RightScale noted, because they require a contractual commitment -- future price reductions from Google are likely to negate any savings benefits.

The balance does shift back to Amazon's favor, even without a long-term contract, for some instance types when comparing the costs of memory.

Because Amazon's compute-intensive instances come packed with almost twice the RAM, the cost per gigabyte can be 50 percent cheaper than using Google's cloud.

Across instance types, however, Google generally offers savings, the report documented.

While pleased with the recent reductions, many Google partners told CRN they don't believe their partner cloud is trying to provoke another price war.

Dj Das, founder and CEO of Third Eye Consulting, a Google partner based in San Francisco, told CRN via email that "Google is simply staying true to the economics of computing and have reduced the pricing of their cloud services to up to 30 percent to reflect the reduction in pricing of the underlying hardware."

Google, by dropping compute prices significantly for the first time since October and passing cost savings to customers, is simply making good on its promise to keep up with Moore's Law, Das said.

Weins also noted in the published report that if Amazon does reduce its prices, it'll be interesting to see if it tries to undercut Google, or just follow a "close enough" strategy.

"The real loser here may be internal data centers, given that Google intends to continue the drive to lower cloud prices," the report stated.