Google’s 60% cut in block-storage pricing is a move intended to unseat Amazon’s dominance in cloud infrastructure.

The highlight of Google’s coming-out party for Compute Engine’s general availability as supported infrastructure was the pricing on its virtual servers and storage. It shows a heretofore absent determination on Google’s part to compete with the market leader, Amazon Web Services, and secondarily, Microsoft.

Amazon has made it difficult for competitors to draw customers by repeatedly lowering prices on standard virtual servers and storage. Microsoft has matched its moves, particularly on storage.

With its announcement this week, Google has come with reference to matching AWS’s virtual server prices while, in a clever move, it has flipped prices around on storage to undercut Amazon. It cut the cost for storage attached to working virtual machines by 60%, making it cheaper than Amazon’s Elastic Block Store. It made up for that massive cut by leaving prices on its future storage — the equivalent of Amazon’s S3 — at somewhat costlier level. It has chosen the sometimes finicky Amazon Elastic Block Store because the Achilles’ heel of the market leader, which it will or is probably not.

For example, both Amazon and Google were charging 10 cents per GB monthly for Elastic Block Store, or what Google calls Provisioned Storage under its Persistent Storage products. Either one is the disk volume that’s attached to a running virtual machine, rather than the temporary disk assigned to it at the server rack. VMs are automatically assigned a bit of temporary storage when they’re commissioned, however it, just like the user’s data, goes away once an instance is shut down. To maintain the configuration of the example and its data, an Amazon user should enroll in EBS. When working with Compute Engine, the user needs what Google calls “provisioned space” on its Persistent Disk service.

[ Want more on cloud pricing? Read Why Cloud Pricing Comparisons Are So Hard. ]

Google cut the cost of provisioned space from 10 cents per GB a month to four cents per GB a month. Cloud storage services have frequently been the focal point of price cutting earlier. But to position Google’s unprecedented 60% cut into perspective, Amazon reduced S3 long-term prices in March 2012 from 12.5 cents to 11.5 cents for the primary GB, a drop of 8%. Google followed suit within two days, cutting its long-term storage from 13 cents to twelve cents, a drop of seven.7%. On Nov. 26, 2012, Google dropped storage prices 20% as Amazon opened its first Re:Invent user group show in Las Vegas. Two days later Amazon announced it’s going to implement a 25% cut. Microsoft matched the cuts on the end of the month with a 28% cut on Azure cloud storage.

Now Google has dropped the cost of block storage by 60%, going from 10 cents per GB per 30 days to four cents. On the end of 2 days, Amazon and Microsoft remained silent — one is tempted to mention it has maintained a stunned silence.

Long-term storage, Amazon S3 versus Google Cloud Storage, is one other matter. Amazon charged 9.5 cents per GB a month for snapshot storage or the storage of a file containing many data objects. Google charges 12.5 cents per GB a month for snapshot storage, although the variation is lower than the three-cent price differential would appear to point out. To get a guaranteed level of disk I/O, Amazon increases the fee to twelve.5 cents. Google appears to assure user-desired I/O levels at no additional charge.

Developers always searching out the bottom-cost infrastructure are certain to take notice. IT managers with responsibility for outsourcing enterprise workloads tend to consider their options besides. The results of Google’s cuts might eventually be a changed competitive lineup in cloud services. Google’s 60% reduction in block-storage cost has the direct effect of bringing down the entire cost of running a workload.

Amazon may need more vulnerability in block storage than generally perceived. The most frequent complaints about Amazon’s operation is the sometimes-unpredictable nature of its EBS service. Virtual machines that normally run fine sometimes seem to decelerate and take longer to finish a job, with EBS being the foremost likely wild card in Amazon’s lineup of services. The “noisy neighbor” problem is mostly a reflection of expecting data from EBS. This occurs when one customer’s busy virtual machine on a shared host uses up I/O channels and puts CPUs on idle, slowing output for one more customer.

Google also heightened the contest on another front with its 10% cut in virtual-server pricing. It listed no examples, but working from Wednesday’s posted prices, a Google n1-standard server with a single virtual CPU and three.75 GB of RAM is accessible at 10.4 cents an hour, down from 11.5 cents an hour. A roughly equivalent Amazon m1.medium server with one virtual CPU and three.75 GB of RAM goes for 12 cents an hour. Direct comparisons, however, are difficult. The virtual CPU at the Amazon machine is the corresponding to two 2007 Xeon cores running at 1 GHz. The Google virtual CPU is 1/2 a double-threaded, modern Xeon core running at a better clock speed.

Storage is the more easily compared service. There Google has chosen to strike in its bid to be taken seriously as a supplier of infrastructure-as-a-service.

Buying power and influence are rapidly shifting to service providers. Where does that leave enterprise IT? Not on the leading edge, that’s evidently: Only 19% are increasing both the number and capability of servers, budgets are level or down for 60%, and just 12% are using new micro technology. Discover more inside the 2014 State Of Server Technology report. (Free registration required.)

More Insights