Azure pricing: How low will Microsoft go?

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.
Written by Mary Jo Foley, Senior Contributing Editor

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?

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