Google Cloud Storage vs. Amazon S3: Price War Accelerates

Google (NASDAQ: GOOG) and Amazon (NASDAQ: AMZN) are locked in a cloud storage price war, trading three blows this week. For channel partners, the Google Cloud Storage vs. Amazon Simple Storage price war begs the question: Will you need to cut prices, too, or can you continue to charge a premium for online storage services like backup and disaster recovery (BDR)?

First the news:

• A Google Cloud Storage price cut arrived early this week;
• Amazon delivered its S3 price cut during AWS re:Invent, a major cloud services conference in Las Vegas.
• Google ended the week with another cut, bringing prices down a total of 30 percent this week alone.

Time for VARs, MSPs and rival cloud services providers (CSPs) to panic? Not exactly. Smart channel partners are charging a premium for cloud storage in specific vertical markets. For instance, health care providers and legal firms are typically willing to pay a premium for cloud storage services that deliver peace of mind.

Still, channel partners can’t rest on their laurels. A growing number of big companies now consider Amazon S3 enterprise-ready. NASDAQ and NetFlix, for instance, were on stage at the AWS re:Invent conference talking about their deep dependence on Amazon S3. NetFlix CEO Reed Hastings actually thanked Amazon for the storage price cut.

Also of concern to some channel partners: Emerging cloud companies like Right Scale have introduced backup and disaster recovery services that span multiple Amazon cloud centers. The idea is to give customers protection by replicating data across multiple regions. I’m curious to see if channel partners see the Right Scale solution as an opportunity or a threat.

Either way, Amazon and Google are trading blows in the cloud storage market. Prices are coming down. And big customers are celebrating the news.