In defense of higher cloud prices

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Amazon vs. Google? This "cloud war" is like Walmart vs. Target

It's true, the cloud wars are heating up, with Google Cloud Platform announcing major price cuts on Tuesday and Amazon Web Services following suit less than 24 hours later at its own event on Wednesday. As a result, there's been a lot of the usual back and forth - who's really cheaper, is it really an apples-to-apples comparison, and what Google's take on scalable pricing means for the ever-shifting economies of cloud computing

No matter how you slice it, the public cloud is getting cheaper than ever before, and plenty of customers present and future stand to benefit. But I think that just as there's a case for going to Whole Foods when you absolutely, positively need GMO-free, pesticide-free, free trade, small batch coffee, there's always going to be room in the market for a pricier cloud that delivers premium features. In other words, there's more to a cloud than just the price tag.                      

Name-drop time: Chris Kemp, Chief Strategy Officer of my former employer, private cloud appliance startup Nebula, likes to refer to Amazon Web Services as the "Walmart of the cloud." Which is to say that Amazon Web Services is cheap and offers a tremendous range of goods, but the selection of goods themselves are incredibly shallow and purposely designed to appeal to as wide a base of customers as possible. If you just want socks, underwear, and toothpaste, it's great. If you have a strong brand preference or just like having a wider selection, it's probably not your first stop. 

Google Compute Engine follows along these same lines: It's a one-stop shop for cloud infrastructure designed to be everything to everyone. Want platform-as-a-service (PaaS)? Yeah, they got that. Just want infrastructure-as-a-service (IaaS)? Yeah, they got that too. Need something a little more in-the-middle? Cool. 

But the crucial point here is that Google Compute Engine, setting the exceptional price drops aside, has also expanded its feature set to be more attractive to developers. In a blog entry, Google Senior Product Manager Navneet Joneja explains the new features, designed to enable customers to blend IaaS and PaaS into an automated, scalable platform that's totally customizable to their needs. 

The ability to use Managed Virtual Machines (VMs) on the Google Cloud Platform lets developers integrate custom runtimes and services into their applications that Google App Engine doesn't already support out of the box; a Google Cloud Deployment Manager that lets developers monitor and manage their apps while also letting them handle configuration management with popular tools like Puppet, Chef, and SaltStack. It's an aggressive play to court developers by letting them use the tools they like to use while still letting them layer the Google secret autoscaling sauce. And that's not even taking into consideration the goodwill Google earned by broadening support for 

"We want to work with developers where they are," Joneja tells CITEworld. 

But at the end of the day, it's still an extremely broad platform, and these changes are aimed at making Google look good to developers and drawing customers away from Amazon Web Services. It's the same low-cost, broad-appeal model, but gussied up and made to look chic and hip. In other words, if AWS is Walmart, then Google Compute Engine is Target (though hopefully less prone to cyberattack than they of the red shirts and Pizza Hut food courts). 

Every silver lining has a cloud, though. In the same way that the major retail chains pushed prices down and pushed mom-and-pop groceries out of business, AWS and Google Compute Engine are making it ever harder for more boutique-y cloud service providers to stay in business. Providers like DigitalOcean don't compete with AWS head-on, but their simplicity-focused approach to infrastructure automatically makes them a little more niche. 

Similarly, companies like Peak 10 have built their businesses on appealing directly to verticals like health services and gaming with specialized offerings and a commitment to understanding their customers' specific businesses. PaaS provider Heroku is moving deep integration with the Salesforce platform that competitors can't match. 

These are solid, sustainable businesses. But they may still find themselves squeezed out if customers don't understand how a more specialized, more robust, or more user-friendly cloud can deliver a lot more value to their business. There's a lot more to picking a cloud than the price tag. 

"The pricing move is still important, and a big deal.  But competitively it will hurt many of the smaller players, not just AWS. In fact, it could knock some of these smaller players out of business," says Paul Burns, president of analyst firm Neovise

AWS is a veritable juggernaut in the industry, with an associated ecosystem that has a vested interest in helping it stay on top, and Google's made a commitment to keeping the price cut train a-rollin'. It's certainly going to draw more and more enterprises to the public cloud. Just remember: You don't have to get all your groceries from Walmart or Target, and you don't always want the cheapest option. Maybe - just maybe - it's worth investing in a premium experience.

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