Google to Give Start-Ups $100,000 in Cloud Computing Credits

Google would like to make more money selling data storage on other services on its Google Cloud Platform, and it’s going after it the old-fashioned Internet way: Give stuff away and make it up on volume.

On Friday, Google is set to announce a new program in which it will offer start-up companies a $100,000 credit on its Google Cloud Platform, according to a post on the company’s Google Cloud Platform blog. The effort is the company’s latest effort to take on Amazon Web Services, the leader in so-called cloud services that encompass a range of back-end computing functions.

The post said the offer was available through several dozen “top incubators, accelerators and investors” but it didn’t specify who those top investors might be. It’s also limited to companies that are less than five years old and have less than $500,000 in annual revenue.

To most people, the idea of giving away storage to make money on storage sounds kind of crazy. But it’s not, at least not entirely. Google is taking a gamble that start-ups will go to it looking for savings, and then stay as they get bigger — paying more for services and allowing Google to recoup its investment in them.

Much the way growing companies sublease office space instead of building a big headquarters, Google’s Cloud Platform is basically a giant set of computer servers, storage, networking and operational features that app makers need to grow. Google rents these things out, relieving companies of the need to buy and operate many computers.

For Google, which probably runs the world’s largest computing system, the business amounts to leasing out the capacity it doesn’t use. Among other things, Google stores large amounts of data and helps companies run data queries like telling a dating app how many messages its amorous customers send to each other. Start-ups that get Google’s $100,000 in credits could use their credits for any of those services.

In some ways, Google is paying for what Amazon acquired free when it was pioneering cloud computing: buzz among growing young companies. A.W.S. was then seen as a cheaper way to get computing and data storage, and it attracted many start-ups, along with stealth engineering projects at larger companies. Some of these early businesses, like Dropbox, have become very large, and their success has helped attract larger companies, like Netflix, to Amazon.

Google may be trying to get some of the same magic. The company has a history of offering start-ups and web developers access to its products, like Maps, to improve their features and make them more valuable to consumers. By offering the data storage credits, Google may be trying not only for free publicity and to cut off some of Amazon’s new business but also looking for novel ways its cloud can be used.

Though Amazon now handles large corporate computing jobs, including work for Apple, it still has time for start-ups. In October, it introduced A.W.S. as a way for small newcomers to use the Amazon cloud.

http://bits.blogs.nytimes.com/2014/09/12/google-to-give-start-ups-100000-in-cloud-computing-credits/?_php=true&_type=blogs&_r=0

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