Google has laid down the gauntlet in the cloud market by telling V3 it intends to reduce its cloud platform pricing so it becomes cheaper than any on-premise installations.
In March Google announced major price cuts for its Cloud Platform product, following rivals such as Microsoft and Amazon Web Services (AWS) in reducing cloud-hosting costs.
Now Greg DeMichillie, director of product management at Google, told V3 that the price cuts were just the start of an "aggressive pricing reduction" strategy.
“That was not a one-time event. We realised that prices had to come down so we decided to be proactive and we will regularly do price cuts until we get to the point where cloud becomes cheaper than on premise,” he said.
DeMichillie said this move was necessary as the current pricing structure means that for some firms, the cloud becomes more expensive than on-premise setups.
“For some companies, when they get sufficiently large, it hits a point where it becomes cheaper to go from cloud back to on premise,” he said.
DeMichillie cited gaming giant Zynga as an example of this move, and said this was proof that the cloud industry was not doing enough to stop this happening. “If you’re in the industry you hear this story and so we decided that we really wanted to be proactive so the public cloud is always cheaper than on premise,” he added.
Since unveiling the price cuts, DeMichillie said many firms have reconsidered using the cloud: “We’ve heard enterprises that have large on-premise installations say, ‘my timeline just moved up’."
Earlier this week AWS said it believes most firms not see the cloud as just the way business is done, with many now not even considering on-premise use.
DeMichillie outlined a similar argument, claiming the cloud helps firms focus more on the things that drive the business forward. “It lets you focus your dollars and talents on the things that make your business different than the things that make it the same: it’s about being able to pay on demand, rather than pre-buying, the agility to try new ideas quickly,” he said.
However, while the benefits of cloud are well known, issues around security and data access remain a concern for many.
A recent ruling in the US that any data stored in servers owned by US firms can be accessed by the government could increase fears. Microsoft has already said it would challenge this ruling and DeMichillie said Google takes a similar stance.
“As a matter principle we only disclose data when we are required to by law. We push back regularly and vigorously on any requests that are overly broad, not specific or otherwise look like they are inappropriate” he said.
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