News: Competition between the big three players is leading to service innovation as they look to keep hold of customers and expand.
There is good news for companies looking to get started with cloud in 2016, with cloud prices lower than they’ve ever been before.
If you follow the pricing of the likes of Google Cloud Platform, Amazon Web Services and Microsoft Azure then this may not come as too much of a surprise.
However, with the entry-level pricing for cloud computing being 66% lower than it was two years ago, the lure of the cloud as a means of saving money has never looked sweeter.
According to Tariff Consultancy’s ‘Pricing the Cloud 2’ report, the average entry-level cloud computing Instance will cost $0.12 based on Windows OS.
The reasons given for the decline in cloud pricing are: "the intense competition between public cloud computing providers, and the rapid product innovation that is taking place among the key worldwide platform providers," said TCL.
The competition in public cloud over pricing is often referred to as being a ‘price war’ and the early days of the year has seen AWS lower its prices for the 51st time, swiftly followed by Google saying that it is up to 41% cheaper than the market leader for comparable custom machine types.
So it would appear that the high levels of competition between the public cloud players are leading to significant benefits, even if this also results in companies being forced to close cloud services due to an inability to keep up and compete.
In addition to the cost element becoming more favourable, the rapid production of services is another area for strong competition that sees the likes of the big three public cloud players continuously rolling out new services.
The reason for all of this is the openness of cloud; if one cloud provider isn’t giving you the services you require at the price you want, then there is likely to be another that can fulfil your requirements and migrating isn’t too difficult a task.
Therefore, it is up to the vendors to continuously innovate to give customers what they need at a price that is competitive and appealing.
According to the research, prices are going to continue to fall; by a further 14% between now and 2020 and service additions are likely to continue.
TCL, said: "Cloud providers are introducing analytical services available for cloud computing applications and are now offering cloud for the emerging Internet of Things (IoT)."
This doesn’t mean that vendors aren’t making money from the cloud though, with TCL predicting that revenue from public cloud services will reach $82bn in the next four years.
AWS for example has launched over 500 product features since 2008 and according to TCL, when it comes to combining both innovation and low cost, AWS is the winner.
TCL, said: "The market share and computing power of AWS gives the company a considerable advantage in providing economies of scale which are passed on to the user."
This may be unsurprising to hear considering that the company is the dominant player in the field, holding a quarter of the IaaS segment, followed by Azure.
As previously mentioned, Google may question this but it is what you would expect a competitor to do.
The research is based on analysis of cloud pricing from more than 20 cloud providers over the past two years.