Cloud computing price war intensifies

Although the cloud market is typically thought of as existing in a state of flux, with no defined dominant force, it seems that a small cabal of bigger firms are stepping up the pressure on small competitors, with a price war that might reshape the industry entirely.

In a recent Gartner report, cloud analyst, Lydia Leong, argued that only a handful of larger vendors have the spending power to invest in the cloud, cut prices and secure growth going forwards.

The problem this poses to businesses that are looking to adopt cloud solutions is that some vendors may be altering their business models and service offers in the future. This could complicate things if firms sign up to specific solutions today, only to see the provider change tact and alter its focus as a result of market pressures.

In particular, IaaS (infrastructure as a service) is being identified as an area targeted by the largest firms, including Amazon, Google and Microsoft, with significant price cuts being introduced by these providers on a regular basis.

Vendors are also altering pricing structures to allow affordable packages to be made available, by harnessing the power of cloud instances that are otherwise idle to handle workloads. This does mean that services may become unavailable to certain customers with only a brief warning, but for businesses looking for the cheapest possible route to cloud adoption, this may be an acceptable compromise.

Whether the price war will have a negative impact on the market as a whole is up for debate, since while cloud customers will be getting a better deal, it is also likely that smaller vendors will be forced out by the sheer spending power of the biggest players, potentially leading to a lack of diversity across the industry.

Leave a Reply

Your email address will not be published. Required fields are marked *