Two months after Microsoft's fee slash, Google prepares to take a lower cut from vendors on Cloud Platform

It's dev-ine intervention


Google Cloud Platform – the perennially third-placed provider in the infrastructure-as-a-service sales race – will reportedly slash the fees charged to third-party vendors that use its cloud marketplace to punt their own services.

According to CNBC, GCP will take a 3 per cent cut of the revenues generated by other vendors on its digital souk instead of the 20 per cent it has historically swallowed.

A spokesperson at the Chocolate Factory refused to confirm or deny the specific financials in the change but sent us a statement:

Our goal is to provide partners with the best platform and most competitive incentives in the industry. We can confirm that a change to our Marketplace fee structure is in the works and we'll have more to share on this soon.

The move comes months after Google buckled to pressure and from 1 July halved the fees charged to developers who sell their mobile applications via the Play Store, meaning they would pay a 15 instead of 30 per cent commision on revenue generated up to $1m.

"With this change, 99 per cent of developers globally that sell digital good and services with Play will see a 50 per cent reduction in fees," said Google in March, ahead of the scheduled reduction.

Apple also came under pressure over the fees it charged developers on iOS and MacOS, and similarly agreed to halve the commission it charges developers via the Apple Store to 15 per cent for the first $1m they turned over.

Larger developers still have beef with both Apple and Google's walled garden policies, and in the case of Epic Games – currently embroiled in antitrust actions against both Apple and Google – that disgruntlement evolved into paying for lawyers to take their frustrations to court.

According to a Stack Overflow dev survey in July this year, in which it broke out cloud platforms for the first time: among developers, Google Cloud Platform (GCP) with 31.05 per cent was slightly more used than Microsoft Azure (30.77 per cent), though both are behind AWS (54.22 per cent).

As for GCP's other rivals' pricing strategies, Microsoft in July lowered its cut from its own digital storefronts (including both business app souk Microsoft AppSource and IT and dev shop Azure Marketplace) from 20 per cent to 3 per cent, and AWS charges around 5 per cent.

Getting more in line with rivals is something GCP needs to do: the division brought in $4.62bn for calendar Q2, up 53 per cent year-on-year, and recorded an operating loss of $591m, albeit better than the $1.4bn a year earlier.

By contrast, AWS made a calendar Q2 operating income of $4.193bn on revenue of $14.8bn; and Microsoft Azure turned over $10.34bn.

Gartner Cloud Services and Technologies veep Sid Nag told The Reg: "This is inevitable. Google is playing catchup with AWS and Azure in the Cloud Marketplace business.

"So yes, they do need to do this. AWS and Microsoft have very advanced Marketplace offerings. For example, AWS has thousands of independent software vendors and millions of active subscriptions and hundreds of thousands of customers.

"In the case of Google – reduction of fees would be another way to attract more customers." ®

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