Azure pricing: How low will Microsoft go?

Azure pricing: How low will Microsoft go?

Summary: Microsoft isn't ready to talk Azure licensing/pricing specifics yet. But there are some broad-brush hints on its Azure Web site about some of the factors that will figure into the company's pricing equation.

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TOPICS: Microsoft, Amazon
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Microsoft is planning to share details about its pricing and licensing plans for its Azure cloud environment at its Worldwide Partner Conference in mid-July. That's what we know.

What we don't know about its Azure pricing and licensing plans would fill a book. But there are a few hints and some educated speculation circulating regarding Microsoft's expected directions here.

Azure is Microsoft's cloud operating-system, programming environment and hosting platform which is currently in beta. Microsoft is expected to release the "final" version of Azure in November during its Professional Developers Conference. At its Worldwide Partner Conference, company officials are on tap to explain to its reseller partners and integrators "the Azure Service Platform Partner Model and Pricing" (as one show session on Tuesday July 14 is named).

Webcast replay: All About Azure

According to the WPC agenda, Microsoft is on tap to outline "the details of the Azure business model, pricing, SLA (service level agreement), and partner offers," as well as the "roadmap to commercial launch" and how Microsoft plans to differentiate Azure from cloud/hosting platforms from its myriad competitors. (There also may be a business-specific "Business Edition" version of Azure in the wings, as .Net developer Chris Hayuk notes in a recent blog posting.)

Update: Microsoft also will unveil "the Cloud Computing Infrastructure Initiative’s Hosted Partner Network Program and outline further details on the Enterprise Dynamic Datacenter Toolkit (DDTK)," according to the partner conference site. The DDTK for Hosters already is shipping; a version of the DDTK for enterprises, slated to be available in the fourth quarter of 2009, is a key piece of Microsoft's "private cloud" offering, and will help users deploy hosted server/service offerings.

It's high time for Microsoft to get specific about what it's planning to charge for Azure and how it plans to best Amazon, Google and others with cloud platforms already available to developers, said .Net and Web services expert Roger Jennings, who runs the Oakleaf Systems blog.

"Putting a price tag on Azure services at its Worldwide Partners Conference is crossing the Rubicon for Microsoft," Jennings said. "Amazon Web Services has a three-year head start in outsourcing Infrastructure as a Service (IaaS) and is reported to have 60,000 customers, most of whom are large organizations."

"As a latecomer, Microsoft must offer substantially lower pricing for application/service instances, table/blob data storage, and data ingress/egress than Amazon or Google," Jennings said. "He said he thought Microsoft should offer "a 50% discount from current pricing as a starting point for a Service Level Agreement (SLA) with two nines (99%) availability, 30% for three nines (99.9%)."

Matt Rosoff, an analyst wtih Directions on Microsoft, agreed that Amazon is the one Microsoft needs to undercut to grab and maintain mind share.

"I don't think Microsoft looks at Azure as a big revenue-generator in itself, but more of a way to keep developers engaged in the Microsoft platform, and to prove that Microsoft is serious about the cloud in order to sell more seats of Microsoft Online (which Microsoft eventually expects to replace some traditional server revenue). With that in mind, I imagine they'll price it very competitively -- probably the same price or slightly less than Amazon's offerings."

Microsoft isn't ready to talk Azure licensing/pricing specifics yet. But there are some broad-brush hints on its Azure Web site about some of the factors that will figure into the company's pricing equation.

In a Frequently Asked Questions (FAQ) document about pricing on the Azure Platform Services site, Microsoft notes that it plans to price its Azure platform in a way that takes into account its reseller partners, and with pricing that is "attractive with the market" and which takes into account a "consumption-based model."

Developers who want to host applications in Microsoft's Azure cloud will see their consumption levels figured based on compute time, measured in machine hours, and taking into account bandwidth requirements ("transmissions to and from the Azure data center"). Bandwidth will be measured in GB, as will storage, according to the FAQ. Transactions will be "measured as application requests such as Gets and Puts."

I'll be attending the partner conference next week and will have more on the Azure details as Microsoft rolls them out. Meanwhile, if you're interested in a high-level overview of what Azure is and where it seems to be going, you might want to check out a Webcast I did recently that was "All About Azure."

Got any pricing/licensing details around Azure you're curious about?

Topics: Microsoft, Amazon

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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15 comments
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  • The Zune of cloud computing

    I just can't get behind any service offered by Microsoft, regardless of the discount they attached to it.

    I'd be thinking about the Zune and Hotmail. And, if by some miracle they actually did field a well conceived and cost attractive product, I'd always be wondering when they were going to start sticking it to their customer base.

    We run a largely non-Microsoft shop and it's far more productive than any MS shop I've ever worked in. Fewer brush fires, we actually have time to develop profit products and stay ahead on capacity planning. IT as a profit center, what a concept. I just can't see tracking in Microsoft into an environment that works so well without them.
    Chad_z
    • Nothing Wrong with Zune

      Or hotmail for that matter.
      If you had a lot of brush fires it was probably due to the incompetance of the IT staff you had in your "shop"
      jdbukis@...
    • Azure might actually be great for you...

      With Windows Azure you don't want to *have* to worry about staying ahead on capacity planning, or even spending capital on the hardware. And you don't need to get skilled up on running/administering Windows in house... and whatever brush fires that might bring if it's not one of your team's primary skill sets.

      What you do get is the ability to focuse on your apps / products, whether they are built with .NET, native Windows, Python, Ruby, or PHP.

      You also get a complete "services-style" application platform that you can leverage ala carte with your on-premise apps, hosted apps, as well as with apps in Windows Azure (or even non-Microsoft cloud services if they support either industry standards like WS-* or defacto web standards like REST).

      [Disclosure: I do work for Microsoft, but my opinions are my own. And I also like my Zune :) - I can buy songs off the radio, and the software is great for social sharing/discovery of new music. Plus, I can use the same points for songs *OR* on XBox Live!]
      johnmullinax
    • This stuff is gold;-)

      SLA with two nines (99%) availability = 24 x*365 * 0.01 = 87.6 hrs

      With the MS infrastructure platform the MSCE can be expected to endure
      over 80 HOURS, or over 3 DAYS, of downtime a year? Surely this must be
      a joke?
      Richard Flude
    • Nothing wrong with Hotmail

      I have been using Hotmail for 8 years and its better then ever. Whats your problem, really dont get it.
      Cayble
    • Alternatives...

      Anyone ever tried EyeOS? http://eyeos.org

      It's been around for several years. Early versions were a bit flaky but it has recently matured into a very good product indeed (and it's free).

      Point is that cloud OS's are not new and it seems to me that M$ is actually entering the game rather late. Moreover, some IT managers might be worried about trusting data to it. I can't help feeling that solutions such as EyeOS & its ilk (where organisations effectively "control their own cloud") might be rather more attractive?

      Best wishes, G
      mrgoose
      • This isn't anything like Azure

        If I'm guna build a cloud app, I don't want to handle the servers... I can't afford to build a cloud... if I could I'd just go get some rack space and put together a cluster that I owned. With Azure, MS handles the clusters, security, geo location, ext... I can just worry about making my app and driving users too it.
        Playos
      • Google App Engine is the only similar offering I know of

        From what MS have revealed of the Azure pricing
        model, anyway. Google App Engine measures
        bandwidth, CPU cycles, storage and so on, and
        charges accordingly, with a free quota to get
        started. For example, you get 10GB per day of
        outgoing bandwidth, then charged at $0.12/GB
        for the rest of that day.

        The main difference is that Google requires you
        to create your website in Python (and only
        supports Django 0.96), although they have just
        introduced beta support for JVM, which supports
        JRuby, Groovy, Scala etc). Azure, while
        obviously pushing ASP.NET, provides Fast-CGI
        support so you can run PHP, Rails or whatever.

        I've got an ASP.NET web service running on
        standard hosting at the moment, and I'm waiting
        to see the Azure pricing model before I decide
        whether to go with Microsoft or Google, but if
        Azure is priced similarly to App Engine, then
        I'll go the Microsoft route. If it costs a lot
        more, I'll seriously consider a port to JRuby
        on Rails.
        markrendle
  • RE: Azure pricing: How low will Microsoft go?

    The standard price for cloud platform services is $100 per month (thanks Rackspace/Mosso). I would be surprised if they were to deviate far from this point... maybe $99 for those who prefer psychological tricks over candid, round figures.

    Sam
    samjohnston
  • RE: Azure pricing: How low will Microsoft go?

    I think it will be hard for Microsoft to offer substantial discounts below Amazon pricing since it is widely believed that Amazon is pricing fairly close to its costs -- and remember that includes the fact that it was able to cover the build out costs and much of the operational costs with its own use of the infrastructure.
    amywohl
  • Azure *could* really help the little guy

    I'm dying to know what the smallest unit for the consumption based pricing model will actually cost. Amazon costs almost $100 / mo to run a website on their cheapest server (regardles of whether you get 1 hit per month or 1 million). If Azure can fix that so the little guy could literally host a site or webservice and pay as little as $1 / month), they will truely be providing a HUGE service to cloud computing. Until then all the milliions of "little guys" out there are stuck with shared (non-scalable) hosting.
    TimoG
  • The Competition

    As I've said in another comment, the main competition
    is Google App Engine. A couple of links for reference:

    Free daily quotas: http://code.google.com/appengine/docs/quotas.html

    Billable quota unit costs: http://code.google.com/appengine/docs/billing.html#Bil
    lable_Quota_Unit_Cost

    That's what Azure is going to have to compete with,
    not the Amazon/Rackspace "your-own-server-in-the-
    cloud" model.
    markrendle
    • Sorry but at this point Google AppEngine is an interesting goy

      Not many serious businesses will use AppEngine at this point. It looks very interesting if you're building a consumer-facing Web portal but not a serious business application. Python is nice but...really. They've promised Java support so that holds some hope. Microsoft has a good history of supporting lots of languages and frameworks. They've already committed to supporting any .NET language and Php and I'm sure more are coming.
      marksashton
  • RE: Azure pricing: How low will Microsoft go?

    Azure will reportly undercut AWS by at least %10, depending on how you measure:

    http://searchcloudcomputing.techtarget.com/news/article/0,289142,sid201_gci1361390,00.html
    Carl Brooks
  • Microsoft doesn't have to be cheapest. Just competitive

    The thing Microsoft has going for it is that there are literally millions of developers and hundreds of thousands of ISV's who use .NET and build on Microsoft platforms. Moving to Windows Azure will be a pretty easy choice for most of them. What else are they going to use? Google AppEngine is a nice toy but not something most businesses will use. Amazon is intresting but you still have to deal with managing your own VM's, update your own OS images, updating your application yourself and managing the replication and distribution of your application yourself. Most of that goes away with Windows Azure.
    marksashton