In the .com boom of the 1990s, companies building a presence on the nascent commercial web bought servers and put them in data centers. In many cases, this costly approach was a necessity.
Fast forward to today. Some of the most popular sites on the internet -- run by large, established companies and young startups alike -- don't own servers, and they've never set foot inside a data center thanks to cloud services like Amazon AWS.
Amazon, of course, is the internet's 800 pound gorilla in the retail space, but it's also built a strong position as an infrastructure provider with AWS, which offers everything from servers to storage space on a usage basis.
It's not only a potentially lucrative business, it's one that has positioned Amazon as a key player in the internet economy. And for that reason, it's no surprise that other large tech companies like Microsoft and Google want in on the action.
Today, Google upped the ante at its Google I/O developers conference by announcing the launch of a new infrastructure-as-a-service offering, Google Compute Engine. Much like Amazon's EC2 offering, Compute Engine enables companies to create Linux-based virtual machines under a variety of configurations, ranging from a single to eight-core machine with 3.75 GB of RAM per core. Pricing starts at $0.145 per hour.
While Google says that Compute Engine will provide "50 percent more compute per dollar", Google's offering is far less mature, broad and flexible than Amazon's. But Google believes that we're still early in the cloud game, so even though it's playing some catch-up, there is still plenty of opportunity to win. Right now, Google's core value proposition is that Compute Engine is built on the same infrastructure that Google runs its own services on.
Is that enough? That remains to be seen, but Google moving strongly into the market will put pressure on Amazon and existing players, which should be a good thing for companies regardless of which cloud they build on.