Microsoft goes head-to-head with Amazon Web Services on price, cloud VMs

Microsoft goes head-to-head with Amazon Web Services on price, cloud VMs

Summary: Microsoft is making generally available its Linux and Windows Server virtual machines, plus its Azure Virtual Network, both of which are key to making Azure competitive with Amazon Web Services.


Microsoft wants the world to know it is ready to go head-to-head with Amazon Web Services on both features and price.

As expected, Microsoft announced on April 16 that its Linux and Windows Server virtual machines (VMs) on Windows Azure are now generally available and ready for deployment. These are the persistent VMs that Microsoft publicly unveiled last June, and which provide users with a way to run existing Linux and Windows Server apps in the Azure cloud without having to completely rewrite them.

Microsoft announced last year that these persistent VMs will allow users to run Windows Server 2008 R2, Windows Server 2012, OpenSUSE 12.1, CentOS 6.2, Ubuntu 12.04 and SUSE Linux Enterprise Server 11 SP2 and apps built on these Windows Server and Linux variants on Windows Azure.

Today, officials added some new pieces to its Azure VM line-up, aimed at customers with highly demanding workloads. In addition, Microsoft is adding Microsoft-validated instances to its VM options for common Windows applications that users may want to run on Azure, including SQL Server, SharePoint Server, BizTalk Server and Dynamics NAV.

Microsoft also is making its Azure Virtual Network technology (codenamed "Brooklyn") generally available, as of April 16. Windows Azure Virtual Network is designed to allow business users to extend their networks by enabling secure site-to-site IPsec VPN connectivity between the Enterprise and Windows Azure. The idea is this will allow users to better connect their hybrid on-premises and cloud set-ups.

On the pricing front, Microsoft also made an official commitment today to match Amazon Web Services on price for all "commodity" services, including compute, storage and bandwidth. As part of this pledge, Microsoft is reducing its general-availability pricing on VMs and cloud services by between 21 to 33 percent, officials said.

To benefit from the cuts, users need to make monthly commitments to Azure for either six months or twelve months.


Just last week Amazon announced its latest round of price cuts on a number of its Amazon Web Services. Microsoft and Amazon have been locked in a price-cut battle in the cloud for months.

Microsoft's new pricing will go into effect on June 1. 

Azure General Manager Bill Hilf said Microsoft is dropping prices of both its VMs and its platform-as-a-service as a whole. He said Microsoft won't be reacting to what Google does on the cloud pricing front because Google isn't really a full-service cloud player, despite announced intentions to play in both the IaaS and platform-as-a-service (PaaS) fronts.

When I asked Hilf about the status of another of Microsoft's already announced cloud-networking technologies, Azure Connect, he said the company's plans for this have changed. Over time, Microsoft plans to fold the Azure Connect (codenamed "Sydney") technology into Azure Virtual Network, he said.

Topics: Cloud, Amazon, Linux, Microsoft, Windows Server


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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  • doing things right

    Microsoft is doing a great job with Azure. Not only is it extremely well done, they are also doing things right by opening it up for free or little cost to developers who want to get a feel for what it's like or even to use it for smaller scale production-level efforts. Long term, opening it up like this will help push developers to recommend it for use in their day jobs, where budgets allow for higher spend.
  • Azure has not been reliable enough

    To be considered "competitive" in any fashion.
    • Reliability

      To be fair, both Azure and AWS have had multiple outages due to a variety of causes. MJ
      Mary Jo Foley
    • It's been more reliable than either amazon or google so anyone using either

      of those would benefit from moving to azure. They also have a great paas platform that is what cloud apps should really be built on that neither amazon nor google do.
      Johnny Vegas
      • Really?

        Then cite something done by either Google or Amazon that comes close to the vastness of sheer incompetence that occurred with Azure just this past February regarding that business with the SSL certificate?
        • How about the Netflix crash?

          Crashing the poster-child of AWS - can you imagine that? And right in the middle of Christmas when they were supposed to make far more money than regular days? I would not attack others if I had a failure like that.
          • Sorry, that's not at all comparable

            The Netflix outage did not affect the rest of Amazon, and it was caused by a massive, massive load on Christmas Eve combined with some load balance settings not being quite right. That was much, much more a growing pain related to a fast expanding, and Internet- stressing business -- Netflix by itself was fingered as being responsible for taking up 1/3rd of the North American Internet bandwidth a month before its outage -- rather than a complete screw-up, as was the case with the February Azure outage.
        • And let's not forget ...

          ... the two-day downtime in June 2012:

          And the AWS US East outage in April 2011:

          And here's some info on the AWS ELB Outage during Xmas 2012:

          • From your own Cmswire source

            "In my opinion, the scrutiny of AWS outages far exceeds the severity. Every computer system will eventually fail, even if there are layers of backup plans, and computers power the cloud. After the April outage, AWS gave customers the ability to distribute their workloads geographically, and many users did. However, some users continued to rely on a single geographic location, ignoring the possibility of a site outage. When you take risks, there are bound to be consequences one day. For many AWS users, Thursday was that day."
          • pwned!

            And *crickets* from JustCallMeBC.
  • Caught in the minutia

    Overall MSFT is evolving its business plan into te new eco/social parading. The future is all about entrepreneurship, small group initiatives, networks, mobility and with Win8 MSFT will make possible a connectivity that will make borders obsolete. People get distracted by the missteps but the overall goals are in place and evolving.
  • I'm not sure

    Great, but still just check how they compare to other cloud providers:
  • Initial Pricing Doesn't Matter to Enterprises

    Over the long term, initial pricing is insignificant. The question you have to ask yourself is do you trust Microsoft not to increase prices when they have you committed to their solutions. Recent enterprise pricing changes by Microsoft has left many with no choice but to move on. No matter how painful that decision is.
    • "Initial pricing doesn't matter to Enterprise"? Ridiculous.

      Yeah sure. "Long term price creep" is TOTALLY the decision criteria Enterprises use. Absolutely.

      That's why VMware is such a minority being that they went from processor to core pricing then tacked on that RAM utilization tax then started charging for every nickel and dime.

      That's why, is barely used by anyone: They've raised their pricing by almost 100% over the past 5 years.

      That's why Oracle isn't used at ALL these days despite being the single, most expensive database & ERP vendor on the market hands-down.

      That's why Apple over the past 3 years has been such a total failure with tablets & laptops with only two product pricing: Expensive & VERY expensive.

      BACK TO REALITY: Historical price stability is one of the arguments I use when justifying Microsoft products and is one of their STRENGTHS - not a weakness. Prices actually for the most part fall behind the inflation curve even after hikes in dev tool costs, database solutions, etc. Meanwhile, Microsoft's cloud services, going back to Forefront Online or Exchange Archiving has NEVER gone up in price so there's not a single instance where OP's scenarios applies.

      Microsoft has a lot of weaknesses but pricing-relative-to-service is RARELY one of them. If OP had criticized time-to-resolution or Red Hat support or an actual argument with substance, I would bother replying but trying to link "ooh-the-price-might-increase-do-you-trust-microsoft" as a reason to not use Azure? ABJECT FAIL.