Jan 15, 2015

How will cloud vendors differentiate themselves from the competition and compete beyond matching price cuts?

For a while now companies like AWS and Microsoft have been cutting prices to get an edge over the competition, but for the most part if one company cuts prices, the others are sure to follow very quickly. This has led to a fairly flat playing field in terms of price, although of course there are differences. How can these companies convince potential customers to chose them over their competitors now that pricing differences have been minimized?
I recently wrote about this topic here: http://www.networkworld.com/article/2868824/cloud-computing/cloud-price-wars-give-way-to-feature-battles-among-amazon-microsoft-and-google.html

The point of the piece is that big cloud vendors like Microsoft, Amazon and Google are moving beyond price cuts as differentiators for their platform. And that's a good thing. AWS and Microsoft Azure, for example, have an ever-expanding catalog of virtual machine instance types - some optimized for compute workloads, others for memory intensive ones. At AWS re:Invent, the company's big cloud conference, it released almost a dozen cool new features to its cloud, such as a new computing platform named Lambda. Microsoft is building up its machine learning capabilities on Azure. These are the types of cutting-edge features and services that could help attract customers to their platforms.
There are actually bigger pricing differences than you imply among the various cloud services. Many of these have to do with the size of the compute or storage that they supply: if your needs differ from the standard package sizes from the major services, it pays to shop around and match things up accordingly.

However, in general I would agree that they have to do a better job of differentiation based on non-pricing things. AWS and Azure and Google Compute seem to be the leaders in terms of other value-added services. The rest have not done a great job showing what else they offer, or hide their offerings with fine print or gobs of pages that you have to wade through to figure out what they really have. With some cloud providers, you have to become a customer before you actually can understand what services they offer.

Not to pick on them particularly, but take a look at GoGrid -- they have dozens of services and products (not really sure which is which), and under each one are pricing details that would make a lawyer proud. Trying to get a grip on why they are better than AWS is daunting. And even trying to get pricing details requires assembling a dozen different details.
Answer this