Microsoft to cut its low-end Windows Azure cloud pricing

Microsoft is continuing to make adjustments to its pricing for Windows Azure cloud-computing platform in an attempt to win over smaller developers.

Starting October 1, Microsoft is cutting the price of "extra-small compute" by 20 percent, according to an August 15 post on the Windows Azure Team Blog. Microsoft is doing away with the extra-small designation and using "small-compute hours" for all its cloud offerings (while providing those with extra-small hours with an appropriate small-compute-hour equivalent). The company also is allowing users more flexibility in how they allocate their compute hours.

Here's Microsoft's chart detailing the changes:

(click on the chart above to enlarge)

Microsoft introduced the "extra small instance" pricing option for Azure developers in the fall of 2010. The “Extra Small Instance” made its debut at $0.05 per compute hour, and was targeted at those creating and running smaller apps on Azure.

Microsoft introduced small instance pricing on the heels of Amazon's unveiling of a new, free entry-level tier for new Amazon Web Services (AWS) customers. Developers had been after Microsoft for a while to make Azure more attractive to those doing pilots and smaller projects.

While on the topic of the ongoing AWS-Azure rivalry, it's worth noting that Amazon announced earlier this month several new enterprise features and additions to its cloud platform. Amazon extended availability of its Virtual Private Cloud (VPC) service, while adding support for Windows Server 2008 R2. Amazon also announced AWS Direct Connect, which allows business users tocreate a connection to an AWS Region via dedicated 1 GB and 10 GB network circuits "in order to enhance privacy and reduce network latency," according to Amazon.

Microsoft has a similarly named offering -- Windows Azure Connect (codenamed Project Sydney) -- which the Softies announced at the Professional Developers Conference last fall and have made available to beta testers. When I asked Microsoft officials how Azure Connect compared to Amazon's Direct Connect, I received the following response via a spokesperson:

"Windows Azure Connect provides customers an easy way to set up secure network connectivity to their datacenter and Windows Azure. For example, customers can deploy a Windows Azure application that connects to their SQL Server database or domain join Windows Azure services to their Active Directory Environment.

"Windows Azure Connect and AppFabric Service Bus are complementary technologies. Windows Azure Connect provides secure network connectivity – in essence cloud-hosted virtual machines and local computers can communicate as if they were on the same network. The AppFabric Service Bus provides application-level federation and connectivity. In many scenarios, customer may need both technologies."

In short, Microsoft is continuing to emphasize its ability to connect and secure both private and public clouds with its cloud offerings, while Amazon is focusing on the public cloud (even with offerings that have the word "private" in their names).