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Cloud Storage: The On-going War to Lock in the Most Customers
Forrester calculated and compared the costs of storing 100 terabytes of data with on-premise storage versus cloud storage and found that the cloud option came in at 74 percent cheaper than the on-premise solution. Those results appeared in a whitepaper written by analyst Andrew Reichman in August 2011. Now, about a year and a half later, it would be interesting to run the same cost analysis. While storage prices are continually dropping, cloud storage cost wars resulting from fierce competition between Amazon, Google and Microsoft have resulted in sharp decreases in the cost of cloud storage.
Terri McClure, a senior analyst at Enterprise Strategy Group (ESG), said that “It’s definitely a race, but it’s a land grab. The race is to the bottom to get more data into the cloud. They are trying to accelerate adoption because the service is very sticky. Once data is in the cloud, it’s hard to switch providers.”
Steve Zivanic, vice president of marketing at Nirvanix, cloud storage vendor in San Diego, told Sonia Lelii of SearchCloudStorage that “if you have no technology differentiation between clouds, then it’s the same as disk-drive vendors waging a war for the lowest price per raw drive. The key is to wrap advanced storage services around the physical drive and sell business value of that overall service. The price cuts between Amazon, Google and Azure are basically battles for cheap, raw online disk.”
Carl Brooks, analyst at 451 Research, said that “Amazon, Azure and Google cut prices to continue to be relevant. You are going to see price competition for a couple of years, and you will see cloud service providers go out of business.”
