Google has once again lowered the cost of its offerings to make it a more attractive option, when compared to Azure and AWS. Now, customers can get a whopping 57 percent discount when they commit to buying a certain amount of CPU cores and memory. However, the catch is customers should commit to a one-year or three-year contract to get this discount.

This offering from Google is similar to the Convertible Reserved Offering from AWS, that allows users to reserve a certain compute instance in the cloud, so that they can change the instance type they want in the future, but can still retain the cost and space. So far though, one of the major areas that differentiates Google from other companies is that clients don’t have to commit to a particular instance size. Rather, they can pick and choose their configuration that best meets their needs at any given point in time.

While retaining this option, Google is also enticing its customers to commit to a particular size, probably in a bid to take on Amazon. Overall, this is a smart move by Google, as it tries to take on the two leading companies –  Microsoft and Amazon, in the cloud market. With this high discount, it is effectively getting new and existing customers to commit to it for a long term, so it can be assured that the business will not go to that of its competitors.

Though this is not a new strategy, it is nevertheless a successful one. Cell phone companies are known to entice customers with free or lower-priced smartphone offers for a commitment for three years or more, and they have been successful with it. In fact, such contracts have become a norm in today’s cell phone industry. By applying the same strategy, Google hopes that it’ll be successful for its cloud business too.

This price cut is a part of the cloud wars between AWS, Microsoft and Google, that we’ve been seeing over the last few years now. In fact, it’s become common for these three companies to cut prices as a response to the other’s strategy. Regardless of this war, it’s the customer who ultimately benefits from this competition because they can get better service at lower cost.

Other than this price cut, Google will continue to offer discounts for the sustained use of its platform. Currently, it offers a 24 percent discount off the list price of a particular machine, and this will continue. Also, Google is planning to cut the price of its virtual machines by eight percent for those using the Japanese virtual servers, and five percent for its US customers.

In addition to this strategy, Google also wants to expand its facilities, so it’s in a better position to service the needs of its customers. To this end, it announced that its launching three data centers – one each in California, Canada and the Netherlands. With this, the total number of facilities will go up to 17 locations.

Let’s see how much Google can tighten this race.

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