According to Microsoft, Google is lowering its marketplace fees

After Microsoft, Google also wants to massively reduce the fees for its cloud marketplace – from 20 to three percent. This should increase the attractiveness of the Google Cloud Platform.

With its GCP (Google Cloud Platform) cloud solution, Google is only number three on the global market behind the market leader Amazon AWS (Amazon Web Services) and the Azure platform from Microsoft. The pressure on Google is correspondingly high when it comes to pricing. After Microsoft slashed the fees for offering software on its marketplace from 20 percent to just three percent in July, Google should now take the same step.

According to one CNBC report, in which the US colleagues refer to company insiders, the marketplace fees on the Google Cloud Platform are also to be reduced from 20 to 3 percent. Google did not confirm the specific price reduction, but announced that the group was working on a new pricing model. For comparison: At AWS, Amazon requires a share of five percent of the sales that third-party providers achieve with applications sold through the marketplace.

For Google this is another attempt to lure attractive independent software developers to its platform and to stand up to the market leader AWS and the Azure cloud. The former high-ranking Oracle manager Thomas Kurian has been working on the competitiveness of Google’s cloud solution as Cloud CEO since 2019. Regulators in the US and Europe have also put additional pressure on the current fee model. Since July, for example, Google has only asked 15 percent instead of 30 percent from software providers in its Play Store who convert less than a million US dollars with their apps. Apple and Microsoft also turned the charge screw.

However, Google remains heavily dependent on its advertising and search engine business. The cloud business has yet to become a real source of revenue and profit. In the past second quarter, Google made an operating loss of 591 million dollars in this segment on sales of 4.6 billion dollars. Google parent company Alphabet generates 82 percent of sales and almost all of its sales in the ad sector.