Amazon and Google are in a price war. Both slashed storage and compute services prices by as much of 25 percent. You can think of this as the airline price wars, now gone to the cloud.
With all of these price reductions one might feel that it’s better to wait for the prices to fall yet again before jumping into the cloud. However, at least for the next few years, those who move to the cloud can count on several more price cuts, perhaps even lower-end services initially being given away free, much like cable TV.
The strategy behind this is pretty clear. The major cloud computing providers know that they must capture market share now in order for them to become the leader in the future. Price should not be an impediment to quickly driving potential customers into this exploding market, thus we have the vendors’ race to the bottom, in terms of pricing.
The major cloud providers are more than willing to take losses early on, if it insures a healthy footprint in the future. Those who are moving to cloud computing will benefit from these price reductions. However, the prices will eventually increase. Watch for those increases when many companies become more dependent upon cloud computing providers.