Google cloud remains price leader, says RightScale

With Amazon’s new Reserved Instance options announced Tuesday, Amazon Web Services customers can affect the size of the discount they get based on how much they’re willing to pay upfront.

In short, the more they cough up now, the bigger the discount. And that sent cloud pundits to their calculators to figure out whether [company]Amazon[/company] has taken back the low-cost cloud crown Google appeared to wrest away last March when it announced Sustained Usage discounts (and cut prices another 10 percent in October.)

Well it took a few hours, but [company]RightScale[/company] crunched its numbers and found, generally, that Google instances remain less pricey  (see the chart below) — but read the whole RightScale blog for nuance.

RightScale Product Manager Hassan Hosseini compared [company]Google[/company] Sustained Use discounts to the new [company]Amazon[/company] new “no upfront RIs” since neither require advance payment and are thus the most like-to-like comparison. He used Linux instances in Amazon’s U.S. East region. His caveat:

“Keep in mind that this is a straight price comparison of similar instances. The specific performance of each instance type may vary.”

In his comparison, Hosseini notes Google’s price advantage ranges from 11 percent to 30 percent but

“AWS also offers more memory on the high-memory instances and twice the memory on the high-CPU instances, along with an SSD, that balances Google’s lower price. Depending on workload, the high-CPU c3 series from AWS could provide a better price/performance option.”

A side note: Hosseini performed a similar price comparison in March. This guy deserves a medal.

aws vs. google price dec. 2014


When customers pay for Amazon RIs up front, the picture changes. Compared to Google sustained-use instances AWS Partial and All Upfront RIs are less expensive options, although as Hosseini writes, those buyers need to weigh the tradeoffs of paying those costs in advance. “Excluding this additional ‘cost of capital,’ AWS costs [in these cases] range from 1 to 14 percent lower than Google,” he wrote.

To recap, Amazon has long offered discounts on compute instances when customers pay in advance and commit to one or three years’ worth of use. Those Reserved Instances (or RIs) are thus significantly cheaper per hour than on-demand instances, but the user is locked in for that time period — during which, by the way — prices may go down.

And, given how much compute workloads can vary, customers can end up locked into idle instances. If that is the case, they’re paying for something they’re not using. (AWS also offers spot instances for one-off jobs.) So the price calculation can be and usually is very tricky. One of the things AWS customers find intriguing about Google’s sustained use discounts is that the price reductions kick in automatically: Even Amazon fans dislike having to track their workloads on spreadsheets which can seem like a full-time gig.

Those opting to pay full-boat upfront for the new RI types can save up to 63 percent compared to the pricier on-demand instances per month — if you project out 3 years.  If you don’t pay anything in advance, you’ll save about 30 percent compared to AWS on-demand instances.

Some were surprised when Amazon did not roll out price cuts at AWS Re:invent a few weeks back. Instead, Amazon SVP Andy Jassy stressed that agility is the key driver of cloud adoption. Changing the topic may be strategic as Amazon faces very deep-pocketed cloud competitors in Google and [company]Microsoft[/company].

For more on the impact of the new RIs, check out this Cloud Options post by Strategic Blue.

It’s good to get a third party’s take on price comparisons and, because RightScale manages workloads across the major clouds, it is as good a third party as any. But remember, price cuts can (and often do) come at any time. Also, AWS is the leader — by far — in public cloud, so Google and Microsoft have to do more, or charge less, to attract customers.

Note: This story was updated at 4:25 p.m. PST to reflect that AWS Partial or Full Upfront RIs are cheaper than Google Sustained Use discounts although buyers must factor in the cost of capital in paying up front.