Google Ramps-Up Cloud Computing Challenge (Update 1)

(Story updated with examples of companies that Google's infrastructure platform could challenge)

(TheStreet) -- Google (GOOG) is aiming to climb-up the ranks of public infrastructure as a service space, presenting the company as a new disruptive force to existing giant Amazon's (AMZN) Amazon Web Services and rising player Microsoft (MSFT) Windows Azure.

Google announced that its Google Compute Engine, a part of the Google Cloud Platform, will be available to high-volume customers such as start-ups all the way to multinationals. To expand its customer base, Google has enacted price incentives for services spanning from computer processing to data storage. High-end data storage costs are being reduced by 60% while online data storage and computer processing services are being cut by 10%.

At the same time, businesses will be made available much bigger and sophisticated computing systems.

"Compute Engine is available with 24/7 support and a 99.95% monthly Service Level Agreements for your mission-critical workloads," the company said in its Cloud Platform Blog.

Google also revealed an expansion of operating system support features. Developers can now run any standard Linux distribution, including SELinux and CoreOS, while previously the Compute Engine supported just Debian and Centos. It's now also supporting SUSE, Red Hat Enterprise Linux and FreeBSD.

Google also announced support for Docker, an increasingly used tool for creating virtual containers from any application.

Google Compute still has a lot of catching up to do against the size and scope of AWS' platform features. Yet with its offerings similarly priced to AWS,' GCE's smarter reliability and performance; Google's strong expertise in data-centers as well as the company's commitment to building out into the IaaS space, AWS may have a formidable competitor. "It's a viable alternative to AWS for organizations who are looking to do cloud-native applications, whether they're start-ups or long-established companies," Gartner analyst Lydia Leong wrote in her blog Tuesday.

The same goes for Microsoft Windows Azure. While Microsoft has already cultivated robust, long-time business customer relationships, Google certainly does not lack the technological prowess to challenge this cloud player. R.W. Baird analyst Colin Sebastian notes that Google's cloud services could produce $10 billion in incremental revenues for the company in the coming years, potentially larger than YouTube.

Amazon fell 2% to $384.51 while Microsoft dropped 0.4% to $38.29. Rackspace (RAX) was also taking a hit, stumbling more than 5.2% to $35.56 as Google's announcement appeared to have intensified the competitive environment at a time when it's still struggling to prove that its shift to OpenStack and hybrid cloud strategy has been a good idea.

Google was little changed at $1,052.95.

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-- Written by Andrea Tse