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Cloud price war heats up: Google cuts costs by 10%

Google has announced price cuts of 10 per cent to the Compute Engine component of its cloud platform, a move that is likely to prompt AWS and Azure to announce cuts of their own.

The search engine giant announced the price drop at its Google Atmosphere Live webcast, revealing that Moore's Law had allowed the company to lower prices.

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In a blog post, Google's senior vice president for technical infrastructure, Urs Hölzle also confirmed that the reduction would come into effect immediately across all regions.

"These cuts are a result of increased efficiency in our data centres as well as falling hardware costs, allowing us to pass on lower prices to our customers," he said. "The move further helps developers realise the promise of cloud computing by providing on-demand access to world-class technology at an affordable price."

Hölzle added that Google hopes its cloud platform will ultimately remove some of the inefficiencies faced by developers, enabling them to become more productive.

"Many development teams spend about 80 per cent of time on what we call 'fix and fiddle,' such as managing systems, fixing bugs and just keeping the lights on. Only 20 per cent of time is spent how it should be — building new products or systems that will be platforms for growth."

Following the price drop, Google will be expecting some sort of response from rival cloud service platforms. In March, the company's decision to cut cloud storage costs by 15 per cent saw similar price cuts implemented by AWS the next day.

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Late last month, Oracle promised that its cloud platform would match the prices being offered by Google and AWS.