Rackspace tumbles, Amazon and others lower following Google cloud launch


Rackspace (RAX -5.9%) is once more falling (previous) due to a product announcement from a cloud infrastructure (IaaS) rival, only this time the culprit is Google (GOOG +0.5%) rather than Amazon (AMZN -1.8%). The search giant has taken its Compute Engine IaaS platform out of beta, and has cut computing and persistent storage prices by 10% and 60%, respectively.

Amazon is also lower, as are Red Hat (RHT -1.3%) and data center owner Equinix (EQIX -0.9%). Like Racksapce, Red Hat is a major supporter of the OpenStack IaaS platform.

In addition to cutting prices, Google has greatly expanded Compute Engine's feature set. The company has added support for more Linux variants (inc. Red Hat and rival distributions) and popular app deployment tool Docker, and is launching a 16-core computing instance and high-I/O storage instances for intense workloads.

Amazon, which just unveiled several new cloud services, still has a big edge on Google in terms of scale, feature set, and developer support. But consulting firm Scalr declares Google to be ahead of Amazon in terms of performance and reliability. They're considered even on pricing.

Moreover Google's IT and engineering resources, together with its expertise in creating cheap, high-performance, data center hardware, should make it a solid rival in time, at least for basic computing/storage services.

Previous: Amazon dominates cloud infrastructure

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Comments (11)
  • investingInvestor
    , contributor
    Comments (2556) | Send Message
     
    The Amazon AWS ecosystem is several years ahead of Google's. Few have heard of Google's IaaS, know its name, or even know someone who has used Google's IaaS.

     

    Google kills about 35% of their offerings per year. Wait and see about IaaS. If Google's IaaS does not take off soon, it will die.

     

    Also, Google monetizes its services by reading its customers' data for marketing intelligence like placed ads and paid for leads.
    3 Dec 2013, 11:40 AM Reply Like
  • ReligiousWacko
    , contributor
    Comments (1862) | Send Message
     
    Does a week go by without one of these companies lowering prices?
    3 Dec 2013, 11:58 AM Reply Like
  • footnotereader
    , contributor
    Comments (75) | Send Message
     
    When Google loses money they kill the product. When Amazon loses money they sell more at a loss.
    3 Dec 2013, 01:13 PM Reply Like
  • Mark Humphrey
    , contributor
    Comments (931) | Send Message
     
    AWS is a growing profit center for Amazon; it's electronics general merchandise sector, about 2/3 of sales, apparently loses money. It's sale of books and content is modestly profitable, but only about 25% of sales.

     

    While growing rapidly, AWS is now only 5% of sales and similar to books/content, only modestly profitable--at least based on what I've read (Paulo Santos). Now enters Google, financial powerhouse that actually makes profits, with big cash in the bank. Google and other profitable powerhouses compete directly and indirectly with AWS. But unlike Google et al, Amazon resembles more a sandcastle-to-the-sky more than power house. It earns virtually no money, despite growing low-to-zero margin sales. One of these days, Amazon--the momentum speculators' dream castle-to-the-sky-- will exhibit negative margins on falling revenue growth.

     

    Personally, I wouldn't want to be snoozing at the base of this castle when macro growth sags.
    3 Dec 2013, 01:58 PM Reply Like
  • Nitin B. Sharma
    , contributor
    Comments (219) | Send Message
     
    I agree with you. Every day, I notice Amazon bringing something new to the public - Kindle HDX, same-day-delivery, Sunday delivery, more content, Drones, etc. etc. etc.

     

    They are searching for revenue growth wherever they can find it.

     

    As I have mentioned in the past, AMZN will suffer immensely when the perfect storm gathers. And that perfect storm would be competitors fighting tooth and nail in every possible way against AMZN's price offerings.

     

    To declare AWS a "clear" winner at $5B annual revenue and this early in the game is naivete.
    4 Dec 2013, 12:37 AM Reply Like
  • Cliff Hilton
    , contributor
    Comments (2840) | Send Message
     
    Auh yes, Google now wants the data from you that you previously didn't share. So, they track you while you surf, while you drive, track spending habits, know which apps you use and know which app has full access to your cameras, ID, passwords, pictures, videos, IM's, telephone number, GPS tracking, and can listen in if they like, and....

     

    What's "Right to Privacy"?
    3 Dec 2013, 01:59 PM Reply Like
  • SteveBower
    , contributor
    Comments (17) | Send Message
     
    How does "Sebastian Stadil, founder of consulting firm Scalr" decide that "Stadil says that the performance and reliability of Compute Engine is superior to Amazon Web Services,..."

     

    The product is just out of Beta (regardless of how long it has been in Beta, it's hasn't had to scale up to production levels), and Amazon has been doing this for years.

     

    I love data-less consultant comments. Fluff and nonsense.
    3 Dec 2013, 02:43 PM Reply Like
  • investingInvestor
    , contributor
    Comments (2556) | Send Message
     
    Steve, I do not know. This smells fishy. But, Cramer says stuff every day that appears to be made up, stock pumping.

     

    Two takeaways: Google has no credible users willing to speak about Google's IaaS; avoid Scalr at all costs.
    3 Dec 2013, 05:57 PM Reply Like
  • SA Eli Hoffmann
    , contributor
    Comments (1024) | Send Message
     
    Is there any reason to believe AWS is not collecting or collecting any less information than Google?
    4 Dec 2013, 06:17 AM Reply Like
  • Cliff Hilton
    , contributor
    Comments (2840) | Send Message
     
    @SA Editor,

     

    Eli, Amazon is not collecting as much as Google. Amazon does not have a phone or a web based search engine yet. It is selling apps that can track everything you do though. This is in the name of "marketing" you at a later point. Others call it "domestic surveillance". I strongly object to it. The NSA can have all it wants on you if you decide to use Google for everything. None of us should blindly trust our government; our constitution protects us from our government. Google and others freely gave away many Americans right to privacy.

     

    I firmly believe what is being done in the name of marketing should be brought to an end. But for the life of me, I don't know why there is no debate on this.

     

    "MIT Technology Review notes that this research could make waves outside of just debates around policy and legal concerns about domestic surveillance."

     

    More at EndtheLie.com - http://bit.ly/1bhcTaQ
    4 Dec 2013, 09:57 AM Reply Like
  • Cliff Hilton
    , contributor
    Comments (2840) | Send Message
     
    @SA Editor Eli,

     

    Here http://bit.ly/1bhnQN6 is just a bit more on our government tracking us. This with Verizon's help.

     

    I believe we should all examine the collection of data from Americans and why we have supported private companies to do so. Its in the name of profit, and more of it. But we have to literally "give up" our right to privacy. I don't think we were "thinking" when this all started. Now there is such an environment that the Right to Privacy has been completely yielded.

     

    Why do we continue doing this knowing what can happen? And do we continue using Google products, knowing that they are one of many that freely gave the NSA data?

     

    If its illegal for the NSA to track us, it is for those private companies that do so as well. But they do it for profit, so its ok?
    4 Dec 2013, 08:35 PM Reply Like
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