2 main reasons for the difference:
- Google micro VM uses a common core, not a separate one. Kernels are apparently the most expensive part of a virtual machine if you look at prices for both AWS and GCE
- Google provides them with a permanent discount on monthly use (an effective discount of 30% per month), while Amazon forces you to make a prepayment for a year to get any discount.
Both of the above factors allow you to have a lower cost for the Google virtual machine.
I tried virtual machines on GCE with shared cores and had no problems. If you use Google monitoring, you can actually track how much the core core is affecting you using a processor theft rate. This article from stackdriver explains this very well.
Side note: stackdriver has already been acquired by Google and is used by Google to monitor virtual machines.
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