As price competition intensifies among the top three cloud service providers, one analyst has warned that cloud buyers should not get drawn into a race to the bottom.
Following price cuts by AWS and Google, last week Microsoft lowered the price bar further with cuts to its Azure service. Though smaller players will struggle to compete on costs, the cloud service is a long way from an oligopoly, according to Quocirca analyst Clive Longbottom.
Amazon Web Services began the bidding in early January as chief technology evangelist Jeff Barr announced the company’s 51st cloud price cut on his official AWS blog.
In January 8th Google’s Julia Ferraioli argued via a blog post that Google is now a cheaper offering (in terms of cost effectiveness) as a result of its discounting scheme. “Google is anywhere from 15 to 41% less expensive than AWS for compute resources,” said Ferraioli. The key to the latest Google lead in cost effectiveness is automatic sustained usage discounts and custom machine types that AWS can’t match, claimed Ferraioli.
Last week Microsoft’s Cloud Platform product marketing director Nicole Herskowitz announced the latest round of price competition in a company blog post announcing a 17% cut off the prices of its Dv2 Virtual Machines.
Herskowitz claimed that Microsoft offers better price performance because, unlike AWS EC2, its Azure’s Dv2 instances have include load balancing and auto-scaling built-in at no extra charge.
Microsoft is also aiming to change the perception of AWS’s superiority as an infrastructure service provider. “Azure customers are using the rich set of services spanning IaaS and PaaS,” wrote Herskowitz, “today, more than half of Azure IaaS customers are benefiting by adopting higher level PaaS services.”
Price is not everything in this market warned Quocirca analyst Longbottom, an equally important side of any cloud deal is overall value. “Even though AWS, Microsoft and Google all offer high availability and there is little doubting their professionalism in putting the stack together, it doesn’t mean that these are the right platform for all workloads. They have all had downtime that shouldn’t have happened,” said Longbottom.
The level of risk the provider is willing to protect the customer from and the business and technical help they provide are still deal breakers, Longbottom said. “If you need more support, then it may well be that something like IBM SoftLayer is a better bet. If you want pre-prepared software as a service, then you need to look elsewhere. So it’s still horses for courses and these three are not the only horses in town.”