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Google Counters Amazon's Storage Price Cuts

Google cut storage prices by 20% at start of week, and then slashed another 10% in response to Amazon's price drops. Is there a storage price war going on in the cloud?

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On Nov. 26, Google cut its standard storage prices by 20% and announced a new form of storage, Durable Reduced Availability, available for $.07 a month per gigabyte.

Google's Durable Reduced Availability service offers the same level of latency as Google's regular storage, but availability might be delayed as the service undergoes a peak of demand. DRA might be suitable for data backup that can wait briefly or for batch processes that could be rescheduled, said Google's director of new products Shailesh Rao in an interview.

On Nov. 29, Google announced an additional 10% price cut for the new service (and for its standard storage service as well). At that rate, the price for a GB of Google DRA should plunge below 2.5 cents by Feb. 1.

Of course, that isn't going to happen. But cloud users are now enjoying a spate of price cuts in the most competitive services of cloud computing. Storage customers bring providers a step closer to gathering more workloads for a built-out cloud infrastructure, which both Amazon Web Services and Google are interested in doing. Google's 10% price drop for a service introduced just three days earlier came on the heels of Amazon's Nov. 28 S3 storage price reductions, which averaged 25%.

[ Amazon announced storage price changes at its Re:Invent show in Las Vegas. Read more at Amazon Web Services Slashes Storage Prices. ]

"We are committed to delivering the best value in the marketplace to businesses and developers looking to operate in the cloud. That's why today we are reducing the price of Google Cloud Storage by an additional 10%, resulting in a total price reduction of over 30%," said Google product manager Dave Barth in a blog post on Thursday.

Effective Dec. 1, Amazon's first GB of standard S3 storage per month drops from $.125 to $.095. In comparison, Google's first GB of standard storage drops from $.095 to $.085 per month on Dec. 1, maintaining what Google sees as its price advantage.

Amazon also offers Reduced Redundancy storage for non-critical data. In this plan, data that is lost can be easily reproduced from a copy maintained by the owner on premises or at some other location. Most forms of cloud storage create at least three copies of a data set. (It's not clear how many copies of data are used in Amazon's Reduced Redundancy storage plan, but it could be fewer than three.) Now priced at $.093 per GB, Reduced Redundancy storage will drop to $.076 on Dec. 1.

Google's Durable Reduced Availability storage is not directly comparable to Amazon's Reduced Redundancy, since Google's service operates with a different set of attributes. But it's the closest service in price, dropping from $.085 to $.063, again maintaining an upfront price advantage.

Both Google and Amazon made similar changes throughout their pricing structure, but the changes are stepped up at different GB intervals, making a direct comparison difficult.

"This seems to be a bit of a pricing war: Google already cut prices by 20 percent earlier this week and then followed up with an additional 10 percent cut today to stay under Amazon's new pricing," observed Jon Brodkin, writing for Ars Technica.

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John Lauro
John Lauro,
User Rank: Guru
12/4/2012 | 2:08:45 PM
re: Google Counters Amazon's Storage Price Cuts
They are still way overpriced, especially in terms of bandwidth costs. Can be ok for small servers, or emergency overflow load, but in general you can save a whole lot of $$$ getting a 3 year lease on your own stack of redundant servers and colocating it somewhere, especially if your server needs don't match. IE: I have some servers needing lots of CPU but little memory, and others that require lots of memory but little CPU. Others might be more flexible than Amazon, but Amazon is too inflexible unless you like to be overcharged. If you fit well with their preset sizes they might make more sense.
User Rank: Apprentice
12/2/2012 | 12:47:36 PM
re: Google Counters Amazon's Storage Price Cuts
Amazon will outcut Google in the coming months. Soon Google will have to sell below their cost!
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