I love Amazon and AWS for the way they keep cutting their prices and for the way they support the startup ecosystem. As an example they offer Forward Partners companies, and the companies from many accelerator programmes $10,000 of AWS credits, effectively making it free to get started on their platform. For these reasons Amazon is the first choice for most startups.
However, Google just slashed its cloud prices and is not cheaper than Amazon for all but the heaviest users. Significantly cheaper in fact. Pricing for these products is complicated, but by the analysis of cloud management software company Rightscale Google is 30-60% cheaper for on-demand usage (i.e. light usage), 21-32% cheaper for 1 year heavy reserved instance pricing (i.e. moderate usage) and 3-19% more expensive for 3 year heavy reserved instance pricing (i.e. heavy usage).
Price decreases come regularly in this market and I’m sure Amazon will take action soon, otherwise startups will start turning to Google. I can watch this sort of price competition all day long, but it will be interesting to see how Google fairs playing the price game against Amazon. Historically they have been a high margin monopoly type business whilst Amazon has always been about low prices.