ProfitBricks Guarantees Better Prices For Cloud Services Than Amazon, Google and Microsoft

ProfitBricks might still be an upstart in the cloud world, but the German-American IaaS provider on Wednesday threw down the gauntlet at the feet of the industry's giants.

The binational company, with dual headquarters in Cambridge, Mass., and Berlin, posted a price/performance guarantee on its website that says it will beat any price for comparable cloud services running any workload on Amazon's, Microsoft's or Google's clouds.

The guarantee may seem an imprudently bold proclamation -- especially when considering the unyielding price war the three rivals have been engaged in over the past two years. But ProfitBricks co-founder and Chief Marketing Officer Andreas Gauger told CRN that the idea of those industry giants locked in a price war is nothing more than a common misperception among cloud buyers.

[Related: ProfitBricks Founder: We Offer The Right Cloud For MSPs]

"They are not," Gauger said of a price war. "And they do not offer the best value out there."

According to Gauger, Amazon Web Services, Microsoft Azure and Google Compute Engine enjoy high margins -- 80 percent or greater -- though the cloud giants don’t share their numbers. And they are replicating the enterprise pricing complexity of the past, confusing a new wave of cloud computing buyers and solution providers, he said.

"Amazon created a perception of value with their 46-plus price drops. Google and Microsoft have promised to match [Amazon's] pricing. Buyers are looking at these drops and thinking they are getting a good value," Gauger said.

But in reality, because of inflexible packaging, those deals aren't that great at all, he said.

"The lack of a custom cloud server size at Amazon, Microsoft and Google makes not just the selection of the server size hard, but it forces the buyer to over-buy what they need," he told CRN.

ProfitBricks' price pledge applies to the entire workload running on the rival IaaS platforms: CPU cores, RAM, block storage and the networking that connects them.

While Amazon, Microsoft and Google have complex pricing models, ProfitBricks has made the price/performance guarantee simple, Gauger told CRN.

In the event that customers demonstrate any "corner cases of special workloads" for which ProfitBricks is more expensive than Amazon, Microsoft or Google, Gauger told CRN his company will lower its price for that customer below that of the other providers.

Gauger seems pretty confident that scenario won't arise. ProfitBricks frequently tests different workloads across multiple providers, he said, and those tests consistently show the startup is between 40 and 80 percent cheaper than Amazon, Microsoft or Google.

"When we first conceived of the price/performance guarantee, we wanted it to be true to our DNA," Gauger told CRN. "It needed to be simple and transparent. It needed to help the IT buyer and cloud reseller see that ProfitBricks is the best deal. Price/performance ratios have always been at the heart of the technology buying equation and the cloud should be no different."

PUBLISHED MARCH 25, 2015