The cloud computing infrastructure (a.k.a. data center) business is a tough place to be these days - and it just became a whole lot tougher.
This week
The price cuts, which range from about 25 percent to almost 80 percent, cover a broad range of infrastructure services and are likely to force
Google is the smallest of the big four cloud infrastructure providers – but the second fastest-growing behind Microsoft, according to figures from Synergy Research (see graph below). Google has said it wants cloud pricing to fall at a pace equal to Moore's Law. That implies a 50 percent price cut every 18 months.
Some analysts believe this cloud pricing war could last a decade. As in other rapidly commoditizing markets, that implies both shrinking margins for all participants, and the growing importance of scale. And it is already squeezing smaller cloud infrastructure market participants, including Rackspace and Salesforce.
Absent scale, it makes more sense to partner than to try and go-it-alone – a factor that no doubt figured prominently in the thinking behind
At the same time as cutting prices, Google also launched several new network connectivity options and cloud infrastructure services this week that appear focused on meeting developers’ needs and persuading them to choose Google rather than Amazon.
Among the new services, Google announced support for Docker containers, an increasingly popular alternative to virtual machine technology. We are likely to hear a lot more about them over the next 18 months.
This story originally appeared on SAP Business Trends.
