How Will Amazon React To This Google Announcement?

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Google (NASDAQ:GOOG) did not let Amazon’s (NASDAQ:AMZN) Wednesday price cuts pass with no response. On Tuesday, the company announced on its Official Google Enterprise Blog that prices for its cloud storage services had been lowered by a further 10 percent.

Amazon and Google’s Price War

Writing late last year, CNET contributor James Urquhart outlined several ways that companies, such as Google, could oust Amazon from its position as the leader of the infrastructure-as-a-service market. Among these strategies he listed: “Figure out how to beat Amazon’s price or feature set.” This is the course of action Google has laid in place.

In June, Google launched its Compute Engine as preview-only product. When the product was released, Google stated that its service would be faster and cheaper than what Amazon provided. Yet, given the company’s relatively recent entrance to cloud computing, Amazon’s service still has much more clout.

But Google has upped the pressure. On Monday, the company added 36 new memory and storage tiers and several new configuration options to make its service more similar to Amazon’s. More importantly, Google also reduced the cost of its standard cloud storage by 20 percent. Amazon responded by lowering prices for its S3 storage service by 24 to 27 percent on Wednesday…

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