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Summary:

Microsoft today unveiled pricing details for its Azure services platform — possibly because customers were reluctant to build an application on the beta platform without knowing what it may one day cost them. The platform is Microsoft’s leap into the clouds, and it’s an impressive first […]

azure-logo_2Microsoft today unveiled pricing details for its Azure services platform — possibly because customers were reluctant to build an application on the beta platform without knowing what it may one day cost them. The platform is Microsoft’s leap into the clouds, and it’s an impressive first step, at least on paper, complete with competitive pricing and lots of concessions designed to get enterprise customers to shift over their IT operations. It also has the potential to become a platform as a service, which would enable far greater levels of control than current platforms, such as those offered by Google; or those tied to applications like Force.com, which allow programmers to build more apps that connect with Salesforce.com; or Quickbase, which does the same for users of Intuit’s software.

What It Is:

  • Windows Azure is a cloud operating system on which developers can build using .NET, Java, Ruby on Rails, Python and other languages. Doug Hauger, Windows Azure GM, said that in the future Microsoft will offer an admin model that will allow developers access to the virtual machine, although they will not have to manually allocate hardware resources as they might with a traditional infrastructure-as-a-service offering such as Amazon’s EC2.
  • SQL Azure is Microsoft’s relational database in the cloud.
  • .NET Services is Microsoft’s platform as a service built on the Azure OS.

What It Costs:

  • There are three pricing models: consumption-based, whereby a customer pays for what they use; subscription-based, with discounts for those committing to six months of use; and as of next July, volume licensing for enterprise customers that want to take existing Microsoft licenses into the cloud.
  • Azure compute is 12 cents per service hour (half a cent less than Amazon’s Windows-based cloud).
  • Azure’s storage service costs 15 cents per GB of data per month, with an additional penny for every 10,000 transactions, which are the movements of data within the stored material.
  • .NET Services platform costs 15 cents for every 100,000 times the applications built on .Net Services accesses a tool or chunk of code.
  • Moving data costs 10 cents per GB of inbound data and 15 cents per GB of outbound data.
  • SQL Azure is $9.99 for up to a 1 GB relational database, and $99.99 for up to a 10 GB relational database.
What the web is saying:
The Register: Microsoft has announced pricing for Azure that marginally undercuts Amazon on raw computing for Windows-based clouds but remains more expensive than the mega book warehouse’s Linux option.
The Wall Street Journal: …Microsoft had priced its Azure service “aggressively,” suggesting the company is serious about establishing itself as a cloud computing provider, despite qualms about the impact the move could have on its own business model which is overwhelmingly reliant on traditional packaged software sales.
ZDNet: Do you think Microsoft is just rebranding its existing datacenter software as “private-cloud”-capable? Or does Microsoft’s private-cloud tools and software give it a leg up over Amazon and Google?
Ars Technica: Microsoft may have a tough time convincing developers that Azure is worth their time, and while pricing is important, it all comes down to trust.
The NYTimes: Critics have charged that Microsoft took a long time to prepare a cloud computing offering, giving rivals – even a bookseller like Amazon – a chance to grab the early attention in this market. Such tardiness has cost Microsoft dearly in the past, especially in search, where Google’s brand remains dominant.

What It Means for Microsoft and Cloud Computing:

Much of the analysis so far has accused Microsoft Azure as being a late entrant to the cloud computing and platform-as-a-service party. They’re right, but Microsoft is still ahead of many enterprises that it hopes to attract as customers, which have done little more than eye the cloud with suspicion. So it may be late, but don’t discount Redmond’s efforts just yet. Microsoft seems to be willing to play with other programming languages and embrace heterogeneous environments in Azure, likely because no enterprise data center runs solely on Microsoft software. The Azure platform also has a service-level agreement that offers 99.9 percent uptime on the storage side, and 99.95 percent uptime on the compute side.

In addition to validating cloud computing in the enterprise and offering enterprises a familiar face in the clouds, Microsoft Azure has a dark side (maybe it’s navy?) in that it will reduce the software company’s profits (though it may, at the same time, generate additional revenue. However, Microsoft knows this, and so far has warned investors about what the cloud stands to do to Microsoft’s earnings. It will mitigate some of the margin loss if it can operate its cloud as efficiently as possible. It’s already researching ways to do so, including using low-power chips that Intel designs for netbooks in its servers to save on electricity costs.

The nature of corporate computing is changing thanks to virtualization, faster networking and performance boosts from multicore processors. Microsoft cannot afford to ignore these shifts, especially as its customers start to realize the power of cloud computing. It may be behind Amazon and other players, but there’s plenty of room for an open platform that’s aimed at enterprises. But Microsoft will have to try to improve its reliability, and I’m still unclear as to how nicely it will play with companies that want to build management platforms and other tools for customers who want a view inside the Azure cloud. But so far, the details around Azure make it a contender.

  1. Very well written and researched

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  2. Just a small comment:
    Azure could reduce MSs profitability rather than profits.

    Thanks for a very informative post.

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    1. Stacey Higginbotham Wednesday, July 15, 2009

      Booris, you’re right. They will just have to run harder to stay in the same place.

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  3. Good article!
    This will fuel the competition between Microsoft and Amazon. Prices are bound to fall even further!

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  4. committedexpertise Wednesday, July 15, 2009

    Just on the lighter side!

    Who offers what matters most in IT industry.

    When Ms offers PaaS, it is considered different to the world, than Amazon Web Service.

    Perhaps something from Prez of USA is different from a Gov. of a state.

    Malick Md PMP
    http://committedexpertise.wordpress.com

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  5. Microsoft seems to be willing to play with other programming languages and embrace heterogeneous environments in Azure, likely because no enterprise data center runs solely on Microsoft software

    Do not expect this soon.Microsoft’s approach in this regard is to embrace these technologies by giving in house alternatives. Perfect example is Iron Ruby which gives you ruby on rails on Windows. The environment will be homogeneous but thats not necessarily a bad thing as Microsoft does know a few tricks.

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  6. Thanks Stacey. Thanks for a nice and summarized article.

    I referenced it in my blog post today – “Microsoft Azure – Its got the muscle but does it have the heart?”
    (URL – http://manishrathi.com/2009/07/15/microsoft-azure-its-got-the-muscle-but-does-it-have-the-heart/)

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  7. well .. its a good news for Developers !!! Sounds interesting .. I would like to try my hands at it … and explore it myself .. and I ll post it on my blog abt it .. if I really get something nice to write abt …

    Cheers!!
    Daina

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  8. It’s cheap! It works better than anything else! – Success!

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    1. Is this really you Steve? :)

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  9. [...] on July 15, 2009 Read a very nice post at GigaOm on the MSFT Azure services platform – here.  Cloud computing is becoming more and more real by each passing day … exciting times are [...]

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  10. [...] | Wednesday, July 15, 2009 | 7:48 AM PT | 0 comments Yesterday I wrote almost 1,000 words on Microsoft’s Azure platform, but I think this video does a good job explaining the basics without all that pesky reading. Steve [...]

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