Microsoft Azure enters price war with Amazon Web Services

Azure launches infrastructure as a service

Microsoft is dropping prices for Azure Cloud Services and for Azure virtual machines to match those of Amazon Web Services and implies that it will cut the prices of other Azure offerings as well to match those of AWS.

In its Windows Azure blog, the company commits to matching Amazon Web Services pricing for compute, storage and bandwidth, which translates into a cut in VM and Cloud Services prices of 21% to 33%. "If you had concerns that Windows Azure was more expensive, we're putting those concerns to rest today," says Azure's operations general manager Steven Martin in the blog post.

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This rate cut keys off of Amazon's pricing but is part of a larger price war that includes AWS and Google in which Google cut prices for its virtual machines by 4% and AWS immediately cut its prices by 26%.

Microsoft specifies it will match AWS services for "commodity services" and says it will continue to do so if AWS drops prices further.

To get the virtual machine discounts customers must commit to six- or 12-month contracts. The discount varies depending on the size of the monthly commitment and the term of the agreement.

So a six-month commitment to spend $500 to $14,999 per month reaps a 20% discount. Paying up front rather than monthly increases the discount to 22.5%. The biggest discounts go to the biggest spenders -- $40,000 and more per month. Those customers can get a 32% discount for paying up front for a 12-month term.

Customers who pay as they use services without term agreements do not get the discounts.

The discounts apply only to standard VM instances, and the new prices kick in June 1.

The price of Linux virtual machines will be reduced by 25% effective today. For example, the price for a Linux small instance will drop from $0.08 per hour to $0.06 per hour, a Microsoft spokesperson says.

Windows Azure Cloud Services Web and worker role prices have been cut 33% for standard instances effective today. So the price for a small worker role will drop from $0.12 per hour to $0.08 per hour, for example.

At the same time as the price cuts, Microsoft is announcing that Windows Azure Infrastructure Services is generally available.

The new service includes boosted high-memory virtual-machine instances of 28GB/4 core and 56GB/8 core VMs for demanding workloads.

Azure is also expanding the list of apps that are officially validated by Microsoft to include SQL Server, SharePoint, BizTalk Server and Dynamics NAV. This means these servers in validated configuration and the applications that run on them can run in the Azure cloud without having to modify them.

These announcements add pieces to Microsoft's overarching scheme called Cloud OS, which blends Microsoft products and services to enable extending corporate private clouds into Azure and other public cloud services as workloads require. The idea is for this to be done as needed and without end users' experiences being altered and without being aware of where the services are being hosted.

Tim Greene covers Microsoft and unified communications for Network World and writes the Mostly Microsoft blog. Reach him at and follow him on Twitter @Tim_Greene.

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Copyright © 2013 IDG Communications, Inc.

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