Microsoft, AWS and Google unleash new cloud war

Cloud giants have begun again to reduce their prices, but this time into new areas of cloud services.

Cloud computing giants may have triggered a new price war, this time on storage.

Until recently, price reductions among cloud computing offerings were mainly confined to virtual machines, while other services provided constant or growing margins. But according to analysts, the declines have moved beyond the calculation, in storage and databases.

Margin always comfortable for suppliers

In a cloud pricing analysis, 451 Research estimates that the cloud price battlefield has moved from virtual machines to object storage, and predicts that other services, starting with databases, will see pressure Decline in prices over the next 18 months.

Analysts observe that prices of object storage declined in all regions, including a drop of 14% in the last 12 months. Virtual machine prices only fell by 5% over the same period.

Price reductions in cloud storage began in the third quarter of 2016, according to 451 Research, with tariff cuts in object storage at IBM SoftLayer. Google, AWS and then Microsoft followed with decreases in storage.

"Cloud providers seem to be playing aggressive games by blowing the whistle, lowering the price of object storage so it does not look expensive," said Jean Atelsek, an analyst at 451 Research.

"This is the first time that there has been a major price war outside of computing, and this reflects the shift from object storage to the mass market.If the price cuts are good news for cloud buyers , They are now confronted with a new level of complexity when comparing suppliers, "he notes.

Storage has become central in price cuts as cloud vendors want to win big deals that migrate out of the company's data-centers to the cloud.

And cloud computing providers show no signs suggesting limited room for maneuver in terms of declining. For example, even after a long series of price reductions for virtual machines, vendors still achieve - at minimum - a margin of 30%.

"There is little data suggesting that the cloud is close to convenience status" reports 451 Research, which predicts relational databases are likely to be the next battlefield of the price war.