If you’re in the market for cloud services, you’re likely finding a plethora of choices out there – and they’re not all the same. When you think about the myriad of competitors in terms of pricing and look at trends over time, the decision-making process becomes easier.
Historical Price Slashing
A few years ago, the price of cloud solutions from the three biggest providers (Google, Microsoft Azure, and Amazon Web Services) was being cut drastically roughly every six months. Those price slashes earned a lot of media coverage, yet some claimed they were engaging in a fake cloud price war. Some of the price cuts weren’t really benefiting the end user, suggesting these companies had other motives in mind.
Price cuts are good publicity, but how are vendors able to pull it off and still make a profit? One way is to squeeze costs so they gain more margin. Some of those providers have huge portfolios of services, which means when a price drops on one, they can make up for it by raising the price of another service.
Price cuts are also a marketing ploy, which is why some users refer to them as “artificial cuts” – so that message is not always one that consumers trust. In the case where prices are truly being reduced, some providers are able to do so by building their own hardware, making it less expensive to operate data centers.
Customer Acquisition vs. Retention
One of the biggest factors in pushing the price down is having a high volume of customers. That means always pushing to gain new customers – not relying on existing ones. This could be a red flag for those considering a vendor, however. If the focus is on customer acquisition, the investment in ensuring current customers are happy may be nonexistent, hurting the quality of the offerings.
As for the future of cloud price cuts, the next area that could gain the attention of the industry is in object storage. Prices have already dropped in every region of the U.S. in this area, drawing much attention from those considering adoption. While virtual machines saw a cut of around four to five percent, object storage has dropped by 14 percent in the last year.
Price cuts are attractive, but you need more than a good price – it’s also important to find a provider that offers excellent service and accountability. At Enterprise Visions, we want you to envision your future in the cloud. We offer excellent customer service and customize our solutions to fit your business needs as well as your budget.