Will competitive price wars kill off smaller cloud providers in 2013?

Cloud computing has evolved far beyond its initial conception and is looking to be massively influential in 2013. Whether it be data storage, SaaS (Software-as-a-Serrvice) or simply outsourcing services, the cloud represents versatility and the perfect tool for modern business.

With such a strong focus on expansion and growth within the cloud market, many large companies are continually undercutting each other in an attempt to attract new custom. Although a price war may be beneficial to customers right now, it is a temporary measure and will most definitely be detrimental to smaller businesses offering similar services.

Companies such as Amazon, Google and Microsoft have all lowered their prices for cloud computing services in recent months, mostly in retaliation. Although low prices may seem attractive, this is most likely a tactic to ward off smaller rivals and once this has happened prices will be hiked back up.

Big Businesses can afford to offer services at rock bottom prices and not make any money at first but smaller companies cannot. Once these organisations have been priced out, the choice of cloud service provider will be greatly reduced to the few established key players, this is when prices will rise.

With costs so low, now may seem like the best time to sign up to a cloud service but there may be another important issue to keep in mind. The larger cloud service operators offer ‘pay for what you use’ packages which appear simple but if not properly understood could lead to substantial bills down the road. Those looking to benefit from the recent discounts should read all of the fine print and keep in mind that these figures will not last forever.

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