Google is reducing sales commissions in its cloud market
Google is reducing sales commissions in its cloud market

When customers buy software from other vendors in its cloud market, Google is trying to reduce the amount of its commissions as big tech companies come under increasing pressure to lower their so-called commission rates.

Google's cloud platform reduced its share of sales from 20% to 3%.

The move marks Cloud Group's latest effort to improve competitiveness since Thomas Kurian joined Oracle as CEO in 2019.

The search giant, which lags behind Amazon and Microsoft in terms of cloud infrastructure, is trying to persuade independent software manufacturers to sell their products in the cloud.

A company spokesperson said: “Our goal is to provide our partners with the best platform and the most competitive incentives. We can confirm that the market price structure is changing.

In the past few months, the big tech companies have been slashing commissions on their platforms, whether it's for consumer apps or commercial products. Some pressure comes with competition as regulatory and legal issues increase.

In July, the company cut its commission on Google Play Store purchases from 30% to 15% and targeted the first $1 million in developer revenue each year.

That year, Apple also offered the same discount to app developers with annual sales of less than $1 million.

In an Epic Games suit, a California judge ruled this month that it will no longer allow Apple to prevent developers from providing links or other communications to keep users away from Apple in-app purchases.

At the same time, Microsoft reduced its commission for purchasing games in the Windows App Store from 30% to 12% in August.

Google Cloud lost $591 million in the second quarter

In Google Cloud Market, customers can find products from well-known software providers. Including Confluent, Elastic, MongoDB, and Twilio.

However, the market lacks products from companies like Accenture, Equifax, FactSet, Freshworks, Xilinx and Hewlett-Packard, all of which are listed on the AWS Marketplace.

According to estimates by UBS analysts, market leader AWS charges around 5% of the registration fee. They said the AWS market has annual sales between $1 billion and $2 billion.

Microsoft announced in July that it would cut the price from 20% to 3%. "We want our expenses to offset the client's operating costs," she added. We will not try to get a share of the revenue from our partners. We help partners sell their solutions, not the other way around.

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