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1 minute read
"We don't need to compete on price". Those are the words of Tariq Shaukat, president at Google Cloud. In recent months, both Amazon and Microsoft have lowered prices of their cloud services to attract small businesses and increase cloud adoption rates. However, Google does not plan to follow suit. Rather, they will compete on unique offerings and a better pricing structure. Unlike its competitors, Google does not charge users by the hour or by the month, but by the minute. Therefore, even with higher unit prices, this more flexible pricing structure can save firms between 20-30% alone, according to Google's own estimates.
Moreover, Shaukat points to Google's skills and knowledge within the fields of data management and machine learning, which he believes are "second to none". In fact, he is confident that Google Cloud will overtake Amazon within 5 years' time.
Time will tell if Google's prices are sustainable and optimal. After all, Google has previously gotten their fingers burned with pricing, especially with their smartphones, most recently the Android One. However, this price was too low, which damaged Google's brand. In light of this, it seems like a wise move to keep unit prices higher than competitors. However, the more flexible pricing structure may actually result in total costs similar to Amazon's and Microsoft's.
