So let’s dissect the blog, as Google does not do press release – you can find the blog here.
We know you have a choice of public cloud providers – and choosing the best fit for your application or workload can be a daunting task. Customers like Avaya, Snapchat, Ocado and Wix have selected Google Cloud Platform because of our innovation and proven performance, combined with flexible pricing models. We’ve recently made headlines for our latest product introductions like Google Cloud Storage Nearline and Google Cloud Bigtable, and today, we’re also raising the bar with our pricing options.
MyPOV – Always good to lead with customers – so good move by Google to mention some notable brand names using Google Cloud Platform (GCP going forward) already. And good to mention that with the launch of Google Cloud Storage Nearline and Google Cloud Bigtable (a press piece with a quote from me here) were also coupled with price reductions.
Compared to other public cloud providers, Google Cloud Platform is now 40% less expensive for many workloads. Starting today, we are reducing prices of all Google Compute Engine Instance types as well as introducing a new class of preemptible virtual machines that delivers short-term capacity for a very low, fixed cost. When combined with our automatic discounts, per-minute billing, no penalties for changing machine types, and no need to enter into long-term fixed-price commitments, it’s easy to see why we’re leading the industry in price/performance.
MyPOV – Last year’s announcements already rippled significant shockwaves across private cloud deployments. The best practice was to use the Amazon AWS cost curve, bend it a little more and – plan the private cloud roll out if an enterprise was able to stay under that curve. With Google’s price cut last year that exercise needed to be restarted and it put a number of private cloud roll outs on hold. Later in 2014 the Google move was dismissed as a onetime move to get into the market. But all the sceptics of a Google repeat now need to review their position. If the same outcome happens as of last year, a number of very large (and prominent) private cloud roll outs are on hold – for good.
On the public cloud side Google equally gains credibility, but the effect will be lesser, as enterprises developing software for the cloud move slowly. But we know already that a number of next gen app projects in enterprises have taken note and are re-crunching the numbers.
Price Reductions
Last year, we committed that Google Cloud Platform prices will follow Moore’s Law, and effective today we’re reducing prices of virtual machines by up to 30%.
Configuration | US Price Reduction | |
Standard High Memory High CPU Small Micro | 20% 15% 5% 15% 30% |
The price reductions in Europe and Asia are similar. Complete details on our compute pricing is available at our Compute Engine pricing page.
MyPOV – Somebody very hardware savvy should try to deduct different buying and relative age cycles in Google’s data centers. But then the cost to operate data centers differs significantly across the world.
We have continued to lower our pricing since Google Compute Engine was launched in November of 2013; together, these price cuts have reduced VM prices by more than half.
MyPOV – Kudos to Google to be transparent on prices, but also on typical seen prices. One can debate if the curve is ‘real’ but we know that GCP customers have seen further price savings post April 2014. So not only a drastic one time drop, but continued savings for customers over time. This announcement of course means another price drop.
Introducing Google Compute Engine Preemptible VMs
For some applications we can do even better: if your workload is flexible, our new Preemptible VMs will run your short-duration batch jobs 70% cheaper than regular VMs. Preemptible VMs are identical to regular VMs, except availability is subject to system supply and demand. Since we run Preemptible VMs on resources that would otherwise be idle, we can offer them at substantially reduced costs. Customers such as Descartes Labs have already found them to be a great option for workloads like Hadoop MapReduce, visual effects rendering, financial analytics, and other computationally expensive workloads.
Importantly, unlike other clouds’ Spot Instances, the price of Preemptible VMs is fixed - making their costs predictable.
MyPOV – Basically Google offering ‘spot priced’ instances for VMs. A good move for non-critical but massive compute loads. A nice showcase with Descartes Labs. Of course Google will deny that it monetizes spare capacity from other (internal) use cases, but at the end of the day there is nothing wrong with monetizing spare capacity. As long as the customer of the spare capacity know what they get, and that’s the case here.
Regular n1-standard-1 | Preemptible n1-standard-1 | Savings |
$0.050 /hour | $0.015 /hour | 70% |
For further information about Preemptible VM pricing, please visit our website.
Google Cloud Platform costs 40% less for many workloads vs. other public cloud providers
Our continued price/performance leadership goes well beyond list prices. Our combination of sustained use discounting, no prepaid lock-in and per-minute billing offers users a structural price advantage which becomes apparent when we consider real-world applications. Consider a typical web application or mobile backend. Its development environment supports software builds and tests, presenting a bursty, daytime load on cloud computing resources. The production environment handles actual user traffic, with a diurnal cycle of demand, aggregate growth over time, and a larger overall footprint than the development environment. The developer environment would benefit from per-minute billing because it can be turned on and off more quickly and you only pay for what you use. The production environment would benefit from sustained use discounting, up to 30% additional discount with no upfront fee or commitment, because it always needs to be on.
MyPOV – Google has shown a lot of innovation on the pricing side, the market has not followed and reacted to that (yet). Changing pricing and with that billing is complex, but Google is doing the right thing for Google by keeping pressure on the subject. On the flipside it shows that Google has not yet gotten so much uptake that enterprises demanded – for like for like comparison – the same pricing mechanisms from competitors. We are in the early phase of the internet – and already load is ‘sticky’. But that should not stop Google from pushing the topic and innovating in the area. Usually in the long run, persistence pays off.
Our customer-friendly billing, discounting, and lack of prepaid lock-in, combined with lower list prices, leads to a 40% lower price on Google Cloud Platform for many real-world workloads. Our TCO Tool lets you explore how different combinations of development and production instances, as well as environmental assumptions, change the total cost of a real-world application hosted in the cloud.
MyPOV – Kudos for Google to create a TCO tool, one of the few vendor provided ones in the cloud. A key sales tool for Google to get to the enterprises it is aiming for. We have seen more uptake of the TCO tool in the last two quarters, it has moved from a ‘gimmick’ to a veritable calculation tool. It would be great other IaaS vendors following suite.
Many factors influence the total cost of a real-world application, including the likelihood of design changes, the rate of decrease of compute prices, and whether you’ve been locked into price contracts which are now above market rates, or on instances that don’t fit your current needs anymore. With Google Cloud Platform’s customer-friendly pricing model, you're not required to make a long-term commitment to a price, machine class, or region ahead of time.
MyPOV – Important disclaimer, each app in the cloud is different. Enterprises may not see the same savings.
This graphic illustrates how our lower list prices and customer-friendly pricing practices can combine to produce a 40% total savings.
Your exact savings depend on your specific application, and may be even greater than what is shown here. To see the impact of our customer-friendly pricing on your specific workload, explore our TCO Tool.-
MyPOV – The gloves are off – there will be pros and cons to Google’s calculation – it will be interesting how the foes respond.
Overall MyPOV
The consistency and the cost leadership are areas that enterprises look for. Google is right to stress the pricing models, as not only the total amount matters, but also the way how it was calculated. More dynamic pricing models will be user friendly. They also permit some interpretation of the elasticity of resource for each vendor. That’s where GCP is looking pretty good right now.
What Google now needs to achieve is getting the load of the enterprise and work hard to get more next generation applications being built for its cloud. Migration aids may be a good strategy, though we are in the early phase of the cloud. It will be interesting to keep observing and commenting in Google’s march into corporate IT. We will be watching.
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