Google Cloud Flex Agreements woo users during a slowdown in demand

As macroeconomic uncertainty proceeds to sluggish enterprise investing on general public cloud providers, Google Cloud is providing a new sort of contract, dubbed Flex Agreements, to incentivize enterprises to shift workloads to its facts centers.

As the identify implies, Flex Agreements presents enterprises the selection to migrate their workloads to Google’s data centers with no up-front commitments, together with entry to free storage, compute and, network expert services this kind of as Spanner, BigQuery, and AutoML.

“Some shoppers don’t have sturdy visibility into what the long term retains, creating it complicated to predict their cloud usage requires. That is why we’re excited to launch a much more flexible technique to how consumers can consume and pay out for Google Cloud companies with the introduction of Flex Agreements,” said Kelly Ducourty, vice president of functions at Google Cloud.

As part of this new licensing selection, enterprises that signal up will be delivered with incentives such as monthly investing reductions, committed use savings, cloud credits, and access to experienced companies based mostly on every month expend, Ducourty extra.

In distinction to of Google Cloud’s no cost tier, which provides $300 in cloud credits and use of in excess of 20 free of charge services for a time period of 90 days — primarily as a way to permit users to attempt out solutions — Flex Agreements arrives into engage in when an business customer options to spend money.

Flex Agreements do away with paying out commitments

“A Flex Settlement is utilized when a shopper would like to operate output workloads on GCP and will be paying funds. With flex agreements they you should not have to have to make prolonged term agreements to unlock discounts and other incentives,” a Google spokesperson stated.

The launch of Flex Agreements is not the company’s 1st work to entice organization buyers with deals promising to convey down their cloud paying out. In 2017, the business released the Fully commited Use Discount rates plan, beneath which it furnished discounted selling prices in trade for a motivation to use a minimal level of assets for a specified term.

In 2022, the business released yet another prepare, dubbed Adaptable CUD, that features predictable and very simple flat-fee special discounts that utilize across various virtual machine households and locations.

Desire for cloud solutions wanes

Google Cloud and its rivals in the public cloud providers phase, including AWS and Microsoft, have been enduring a slowdown in demand from customers in cloud companies as enterprises — dealing with uncertain macroeconomic conditions — rein in their spending.

Google Cloud income grew 32% calendar year-on-yr for the quarter finished December in comparison to 38% development throughout the prior sequential quarter.  

AWS saw a similar pattern. In spite of a 20% 12 months-on-year maximize in profits, achieving $21.4 billion in the fourth quarter of 2022, AWS’ development amount was slower in contrast to the 27.5% and 33% progress seen in 3rd quarter and second quarter, respectively.

Microsoft, also, has viewed its cloud desire slow down and is strategizing to use AI-primarily based products and solutions to bridge the revenue gap.

The Windows maker noted 29% development in full cloud profits, climbing to $21.5 billion for the second quarter of fiscal calendar year 2023, slowing from the prior quarter, when the enterprise posted 31% growth for the segment. 

As a outcome of a slowdown in profits development in the wake of a using the services of spree in the course of the pandemic, tech organizations have applied sweeping layoffs.