Google Cloud has made a major change in hopes of being more competitive, slashing the commission it charges for third-party cloud app sales.
Much like Google or Apple’s app stores, cloud providers often charge a commission on third-party apps and services that vendors sell on their cloud marketplaces. Google had previously charged a 20% commission, but has lowered its fee to 3%.
The move will help Google better compete with its rivals, and brings its revenue share percentage inline with them. According to CNBC, it’s estimated that AWS charges roughly 5%, while Microsoft reduced its fees from 20% to 3% in July.
Google Cloud CEO Thomas Kurian has made no secret of his desire to help the company move from third to second place in the cloud industry within the next several years. Matching its rivals’ revenue share fees is critical if it wants to continue to attract developers and third-party vendors.
“Our goal is to provide partners with the best platform and most competitive incentives in the industry,” a Google spokesperson told CNBC. “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.”