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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.

Patricio Robles

Published 28 June, 2012 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (4)

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Arpita

Hi Patricio Robles,
Thanks for this great post !
Google has emerged in the cloud services to be in pace with Amazon.This is a great move and hope that it gets success in this venture too.

Thanks again
Regards

about 4 years ago

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Depesh Mandalia, Head of Digital Marketing at Lost My Name

Only about 10 years late? Will need a few years to mature still - Amazon has a decade's worth of reliability and trust behind it.... will be interesting to see where this goes, G can't rely on its brand alone to get the big players to switch

about 4 years ago

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David Sealey

They'll be a late comer to this part of the market with Amazon, Rackspace and Salesforce having established I/PAAS offerings.

More competition in the market though is good for the buyers of the service as it should in theory drive down prices. Alternatively Amazon and Rackspace may continue to market an advanced (or premium) service that won't be affected by a new-low cost entrant.

Google ultimately need to give businesses a reason to switch which is either amazing prices or premium features that the others can't offer.

about 4 years ago

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Zenith

This is actually good news, because I use amazon, but there prices seem to be trickling up, so competition is actually a good thing in the case

almost 4 years ago

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