Amazon Web Services said Wednesday it would cut prices for its public cloud infrastructure services, including rentable compute power, storage capacity and database.

The announcement comes the next day after Google, one of the biggest contenders for Amazon’s share of the public cloud market announced a dramatic price reduction of its own. Urs Hoelzle, senior VP of technical infrastructure at Google, said the company’s goal was to bring the price curve of cloud VMs (virtual machines) in line with the price curve of hardware, which follows Moore’s Law.

AWS, the world’s biggest IaaS provider, is facing increasing competition from the other internet giants with massive data center infrastructures who have been stepping up their public cloud offerings, demonstrating that they were serious about wrestling market share away from the incumbent.

In addition to slashing compute, storage and cloud analytics rates, Google also announced a big change to the pricing structure for renting cloud server capacity. Instead of selling reserved compute capacity at a discount (like Amazon has been doing) the company will charge users less for instances they spin up on demand but keep running for long periods of time.

Andy Jassy, senior VP of AWS, announced Amazon’s price cut at the company’s summit in San Francisco. He said this was its 42^nd consecutive rate reduction, and that the company had been lowering prices steadily over the past few years without the competitive pressure that exists today.

Starting in April, AWS cloud VM instances will cost 10% to 40% less, depending on the type of instance. Newest high-performing instances will cost 38% less, while price cuts for previous-generation cloud VM instances will range from 10% to 40%.

AWS cloud storage service, S3, will cost about 51% less on average, reductions across different pricing tiers ranging from 36% to 65%.

Amazon’s cloud relational database service will cost 28% less, Jassy said.

According to RighScale, a company that helps clients choose and manage outsourced cloud capacity, on-demand cloud VMs (virtual machines) Google offers are now cheaper than comparable VMs available from Amazon at rates charged before today’s announcement.

“In all the cases that we analyzed for on-demand, Google was significantly cheaper — saving customers 38-60 percent compared to AWS rates,” Hassan Hosseini, product manager at RightScale, wrote in a blog post on the company’s website.

Microsoft, another major rival for public-cloud market share, on Wednesday announced general availability of its public cloud services served from a data center in mainland China.

The company said it was the first global cloud service provider to offer domestically hosted services in the country. Microsoft set up its cloud infrastructure in China by partnering with local data center operator 21Vianet.

Microsoft also changed the name of its cloud services this week from Windows Azure to Microsoft Azure, dropping the name of its operating system from its public cloud brand.

AWS has a data center in Hong Kong, and its website says a Beijing region is “coming soon.” Its other Asia Pacific data center locations are Singapore, Tokyo and Sydney.