Google Platform Live to Boost Price Pressure on All Big Cloud Players

NEWS ANALYSIS: Google Platform Live will pose a major challenge to Amazon Web Services, Cisco, Microsoft and other companies moving into the cloud by cutting prices. 

Cloud computing is no longer all about a bunch of competitors trying to catch up with Amazon Web Services. Google—the one company most mentioned as the company that could really give Amazon a headache—wielded its technology, marketing and pricing power on March 25 to upend the cloud race.

Google zeroed in on some of the biggest obstacles slowing the continuing penetration of cloud computing into enterprises by slashing its prices and simplifying overly complex cloud pricing models, which was a major complaint about Amazon Web Services.

In addition, Google wooed its developer audience with lots of new development tools. The Googlers on stage also addressed a lot of corporate concerns including new management tools and, in particular, database and query capabilities drawn from Google’s infrastructure and now made available to developers.

And tech marketers should take note: Google live streamed its entire one-day event (not just keynotes) and provided a Google+ and Twitter gathering page for viewers worldwide. The use of video streams from technology events has lagged the consumer use of video but events such as Google Platform Live are resetting the concept of technology product introductions.

The Google event took place during a week when major cloud and cloud-wannabe vendors were busy making product introductions. Cisco introduced a cloud-based partner platform along with a $1 billion investment aimed at being the infrastructure for the Internet of things (IoT) monitoring and management market. Cisco is late to the cloud party and Google’s demonstration of its Big Query capability to ingest 100,000 rows of data per second puts it in the IoT management race. Later in the week both Amazon Web Services and Microsoft are expected to make major cloud announcements.

The impact of Google’s commitment to the cloud computing marketplace should not be underestimated. Detractors will contend that going to the Google Cloud requires a commitment to a consumer cloud business whose main income is still derived from inserting ads near user queries.

The main knock against Google is the ad business is the mother lode and every other activity, from corporate cloud services to self-driving cars, are just a diversion soon to be jettisoned at the first sign of ad weakness. While the self-driving cars remain a long bet unlikely to pay off this decade, the corporate cloud services are something else.

The services were born within Google’s existing infrastructure and can be introduced to the market without competing with existing products (which is a problem that IBM and Microsoft are contending with), nor seem as a far a stretch from an existing business such as Amazon's Web retailing business.

Google was smart to focus much of its initial message on simplified pricing. Much of current cloud pricing is a lot like going to an automobile dealer and pricing the wheels, engine and body rather than getting a simple price for the whole automobile.

The goal of the pricing model according to Google Senior Vice President Urs Holzle was to create a simplified model as well as to synchronize cloud pricing with the rapid decline of hardware and processor prices. The Google price cuts ranged from 30 percent upwards and eliminated a lot of the precontracting required to get the lowest prices available.

While the Google announcements will force Amazon to recognize that for the first time since AWS came into being that a competitor is now in the market willing to fight for customers, developers and users based on price and capabilities, the biggest immediate impact will be on traditional vendors entering the cloud competition.

IBM and Microsoft have indicated that the cloud is their future. Those traditional vendors now have to rethink the pricing and capabilities they are going to encounter. Google’s entrance marks a new level of cloud competition, which is good news for customers thinking about the cloud.

Eric Lundquist is a technology analyst at Ziff Brothers Investments, a private investment firm. Lundquist, who was editor-in-chief at eWEEK (previously PC WEEK) from 1996-2008 authored this article for eWEEK to share his thoughts on technology, products and services. No investment advice is offered in this article. All duties are disclaimed. Lundquist works separately for a private investment firm which may at any time invest in companies whose products are discussed in this article and no disclosure of securities transactions will be made.