Yeah, the current price is ridiculous for:

- jobs that can fit in 1.7 GB of RAM or less (Amazon's Small Instance has 1.7 GB of RAM and is about half the price than the cheapest Google plan).

- reserved heavy utilization jobs (compared to Amazon Medium 3.75 GB RAM Heavy Utilization Reserved Instances, Google is 100+ USD/month versus 35.65 USD/month for Amazon).

For jobs requiring 3+ GB of RAM and non-reserved utilization, prices seem to be about the same (and CPU performance seems to be slightly better for Google).

The Product Management question is: if not the price, then what? Without a killer Amazon feature, they're just going to play catch-up.

Maybe with the Google brand? AppEngine existing customers? Access to special data-sets or APIs? Future price drops? The later might be the most likely, once they reach scale, since their data-centers are famous for being energy-efficient.

Google will promote their excellent customer service and how they provide excellent support to developers when things go wrong (i.e., their API is down). /sarcasm

The use cases they're suggesting tend not to benefit from reserved pricing. I think they decided to launch focusing on a small segment of jobs (high-scale, intermittent) so they can get things working well, then slowly expand the use cases and pricing to make it work for other scenarios...

Even Google can't instantly replicate everything Amazon has done in 5-6 years with AWS!

Without real life performance benchmarks, price comparisons mean little. If a calculation that takes 8 hours pr data set on amazon, takes 5 hours on a similar Google instance, then Google will end up being is cheaper despite having similar pr hour prices.

I quite like the command line tooling GCE comes with. It's a much nicer user experience.

The cheapest thing Google is offering seems to be roughly equivalent to an EC2 medium instance though, which is $0.16/hour.

At first glance, Google offers much more powerful machines at a given price point vs AWS. Amazon offers lower price points, but the machines are really limited.

I think AppEngine is the competitor for the super-low price points. Free < $15, and I'd imagine you could run comparable apps on AppEngine vs Amazon's micro tier.

That's probably a valid case at scale. But how are they going to attract users at that price? AWS is free to play with, after all.

This is a shock to me, honestly. I firmly believe that cloud hosting is a commodity good, and that Amazon can be beaten (easily, even), but only on price. And Google's not even trying to compete on price...

Edit: closer analysis shows that Google's boxes are somewhat faster and that they don't have an equivalent to EC2 "small". And they're slightly cheaper, by about 10%. So this is a valid price play, just not a terribly impressive one. I honestly was expecting them to do something like they did for Google Drive, undercutting the competition by a factor of 2 or more.

Perhaps Google doesn't want to define their offering in price terms, but in terms of power. Their demo focused on accelerating computations that could lead to a cure for cancer.

I think pricing is just one of the dimensions on which AWS will be beaten. Google's pricing doesn't put them out of the game, and they can lower it later.

Why would they undercut by a factor of 2? They seem to be going for better and more predictable performance at a slightly lower cost without going into the low end. I'd like to see more but I didn't really expect any major undercutting considering we already know GAE pricing.

If that's what they offer, then who's going to bother moving? AWS is there, it works, everything integrates with it and it's what everyone knows. If you're starting a site, and this is your choice, you're probably going to stick with what you know. Startups aren't generally price sensitive to 10% at that level, unrelated growth and failure will swamp any optimizations on that scale.

Minor price differentials only matter to big sites. But that's also where the cost of moving is the highest. Would you move reddit.com to Google for a paltry 10%? You'd have to think really hard about it, for sure. Maybe you have cheaper optimizations that could get you that 10% instead.

They're looking at the long term. What they announced today isn't going to make or break the business. They can always lower prices but undercutting and realizing later that they need to raise them to maintain the business model is not something they are going to flirt with again.

I don't think they expect people to migrate in waves but I think there will be a time when "we know AWS" isn't a sound argument. There are plenty of projects to come that can evaluate both on their own merits. It's what each does from today that will answer those questions.

Also, GAE no doubt will play a role. I'm interested to see what comes of Cloud Endpoints (REST APIs) and other integration we can get between the two. I think this opens up some very interesting possibilities but I won't get into that.

And let's not forget that not everyone is thrilled with AWS. It's a great service but it has flaws. Google can afford to make a long-term effort to build a solid product that goes head-to-head with AWS.

not on the top end.

   provider   name              cores     ram    $ / hour
   google     n1-standard-8-d   8         30GB   $1.16
   ec2        m2.2xlarge        4         34GB   $.9
   ec2        m2.4xlarge        8         64gb   $.8

so if you're ram constrained, it's not obvious that google is a win. Still, it's really nice to have serious competition to ec2. Hopefully amazon will be smart enough to mimic much of the ec2 api, not because it's pretty or nice, but because we have huge investments in it already.

You probably meant 'Google will be smart'

The "micro" instance on Amazon is essentially useless for most things. It'll do things like just suddenly pause for 30 seconds. It's a shared CPU or somesuch, so you'll get periods where your instance is effectively dead.

This has been my experience as well - you can't even run a tiny web service with a few users on it, anything more intense than serving static pages can result in the instance sometimes becoming unresponsive. It's fine for playing around with but not something you really want to use with anything serving users.

I had to run a few small Clojure web apps for a customer on micro instances because only a few people would use them simultaneously, someone other than myself thought this was a good idea. I ended up running them using "nice" to keep the CPU use away from 100% and that solved the issue of being throttled. YMMV

It throttles if your cpu is at 100% for a few seconds. Must cpulimit heavy processes. http://gregsramblings.com/2011/02/07/amazon-ec2-micro-instan...

It fits with the "use cases" they describe on the page: Batch Processing, Data Processing, HPC.

They probably decided to focus there so they can start with 1,000 new customers of meaningful size instead of 1,000,000 tiny accounts. Even Google needs time to scale up new offerings and the business processes around them!

I think Google learned the hard way that selling to small users results in huge support cost (see also: App Engine, pretty sure that was the reason behind the price hike). Neither AE or GoogEC2 are the kind of services you can simply rely on an FAQ for, and it just isn't in their culture to offer hand-holding on a massive scale.

Maybe they will work their way down to lower tier options like Amazon.

Am I reading this right? $30,000 for the cheapest BMW? I can get a Ford for $12,000!

Sorry, it's just that the "$X for the cheapest Y" argument's always bothered me as a particularly false comparison. I remember the same in the Dell vs Apple arguments a few years ago.

That's true with differentiated products. Besides price, what is the differentiation of Google's service over AWS?

They are differentiated by processing power, RAM, etc.

To, continue the RAM analogy Honda created the Acura brand to have higher levels of customer service so their 30,000$ TSX could better compete with BMW's 30,000$ M3. Thus, Google by only offering relatively expensive instances can better target the Amazon's most valuable customers.

Your Honda versus Acura muddies the comparison. Acura is a luxury brand. The consumer gets clear value-add through additional comfort, improved build quality, better customer service, etc. The differentiation is clear. The target customers are also different.

In the Google/AWS example, additional power/capacity can either be incremental (10% more RAM, etc), or class defining (web server versus super computer). There may be other attributes that stand apart, but everybody seems focused on price and cpu/ram. I don't know AWS well enough to honestly compare, but is Google's service incrementally different, or does it provide a capability that AWS doesn't offer?

Performance. I believe other comments in this thread have described the way that the lower tiers for the two services don't quite match up.