A Race to the Bottom?

If your Cloud strategy is based on price, think again. This recent announcement from Google shows just how far prices are coming down. No doubt we will see a response from the other players. So as a partner, it is crucial that your Cloud offering is based on value and not just price.

On another note, in all other industries, risk is proportional to reward (ie. the higher the risk, the greater the reward). However, in the IT industry, we seem to have this backwards. The Cloud model means the supplier is taking on more risk, but in driving prices down, we are effectively reducing the reward. Sadly, I think we will see some big Cloud providers disappear before we realise that we can’t continue like this and hope that volume will take care of the profit.

Is 1 cent per GB the new market rate for cloud storage?