With Google Compute Engine launch, cloud market enters new era

It only took a year and a half but Google Compute Engine is now officially generally available.

Even though the service been around in some form since the middle of 2012, this is a milestone for a couple of reasons.

One is that I’d expect more marketing from Google that could make more companies aware of the service. Among web businesses, Amazon Web Services is the first provider the comes to mind. But I imagine that soon enough more such companies will become aware of Google’s service, ramping up the competitive environment.

We might also get some new competitive analysis of the service now that it’s officially available. Some analyst firms only include generally available services in their reports and so have been omitting Google. I’d expect to see Google Compute Engine included in more comparisons of services going forward which will help potential customers make smart decisions.

But most important will be the impact on the overall market. Gartner’s Lydia Leong laid it out nicely in a blog post this morning where she wrote: “AWS and Google will hopefully goad each other into one-upsmanship, creating a virtuous cycle of introducing things that customers discover they love, thus creating user demand that pushes the market forward.”

If that plays out, this is great news for users who are likely to see stepped up innovation and better pricing.

Leong also touches on another interesting issue: the creation of two camps of IaaS services.

On one side will be AWS and Google, with offerings that will be attractive to web startups without legacy gear. That will be partly because the services cater to those types of companies but also because neither AWS or Google offer the kind of hand holding that enterprises want.

On the other side will be Microsoft’s Azure plus the host of traditional vendors like HP and IBM that are also now offering IaaS and targeting their long-time enterprise customers.

This division is probably a good thing for the service providers. It means if they choose, they can focus rather than try to be all things to all customers. It’s going to be a huge market so there’s no reason that the providers can’t try to specialize and still do well.

That's also good news for customers, who could see better services that meet their needs, rather than a huge catalog of features, many of which they don't want.

Leong said it well when she wrote: “We’re now moving into a second phase of this market, and things only get more interesting from here onwards.”

Read more of Nancy Gohring's "To the Cloud" blog and follow the latest IT news at ITworld. Follow Nancy on Twitter at @ngohring and on Google+. For the latest IT news, analysis and how-tos, follow ITworld on Twitter and Facebook.

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