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Microsoft's Azure advances may not be enough to catch Amazon Web Services

Experts say AWS has locked up many customers already

By , Network World
April 16, 2013 05:25 PM ET

Network World - Microsoft is adding to its Azure cloud service offerings and lowering prices in order to attract customers who may already have chosen another service provider, experts say, but it might not be enough.

By matching Amazon Web Services pricing and supporting IaaS, Microsoft puts itself in a better competitive stance, says Al Gillen, a program vice president at IDC.

[ BACKGROUND: Microsoft Azure enters price war with Amazon Web Services

PRICE WAR: Amazon, Google both drop rates again ]

Customers with traditional Windows data centers and who employ the Windows .NET framework already had applications that wouldn't run in Azure. For them, "Azure was interesting but not applicable," Gillen says.

While it's a step forward for Microsoft, the new offerings and pricing won't unseat the dominance of AWS, says Ed Anderson, an analyst with Gartner. "This isn't going to change the momentum for AWS," he says. "There's no reason for enterprises to disrupt their cloud services."

Microsoft has done several things to make Azure more attractive. First, it has made its IaaS offerings generally available and added to them so they now include support for high-memory virtual machines for demanding workloads.

Azure has added support for a set of validated instances of popular servers to Azure. These validated instances and applications they support can run in a customer's private network or in the Azure cloud without being altered. The list now includes SQL Server, SharePoint, BizTalk Server, and Dynamics NAV. Microsoft already announced support for Linux variants SUSE, Ubuntu and CentOS.

And Azure pricing is being cut 21% to 33% for commodity purchases such as compute, storage and bandwidth.

The price reduction to align with AWS may be necessary, Gillen says. "They face a certain pressure to be cost-compatible," he says. Microsoft doesn't necessarily lead the industry in cloud service customers, he says. "They can't come in with high price points and justify it. There are [price] expectations put on them by the competition."

The price cuts are for basic services, says James Staten VP and principal analyst for Forrester, so customers will view Azure and AWS on par with each other from that aspect. "It takes customers' excuses away that they might have used to stay away from Azure," he says.

The differences between the two providers come out with higher-end services where pricing will not align, Staten says.

AWS has lowered prices for various services 30 times in the past year. "They're innovating at a massive rate," says Gartner's Anderson. "Their value-added services are exploding and they have a huge partner infrastructure that works with solutions today."

"Amazon has all the momentum right now," Anderson says, even after Microsoft's latest announcements. "Microsoft definitely has some work to do if they want to make up for lost ground." He says that many businesses have already bought Amazon's IaaS and other cloud services and capturing [these customers] will be tough for Microsoft.

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