Today Microsoft’s Azure cloud computing service team announced a product milestone, and made a pricing promise that will shake up its market vertical. Today, Azure took its Infrastructure as a Service product out of pre-release, making it generally available. Customers of the service can now expect uptime promises akin to what they are accustomed to with the Azure Platform as a Service product.
But perhaps more importantly, Microsoft today announced a new, open-ended promise to match the pricing of the basic services provided by Amazon’s AWS service; the pledge specifically impacts Amazon’s compute, bandwidth, and storage services. What they charge, Azure will not charge. In conversation with Microsoft, the company emphasized that it may charge less, but never more.
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There appears to be no listed end date for the promise. In a blog post, Microsoft stated that this new effort will require an “immediate effective cut with reducing [the] GA prices on Virtual Machines and Cloud Services by 21-33%.” If you are an Azure customer, your costs just went down.
As component to its news today, Microsoft has added new higher-memory virtual machine instances as customer options, including systems up to 8 cores with 56 gigabytes of RAM.
Frankly, this is a good day for Azure, and something of a challenge to Amazon. AWS, long the market leader in its category, can effectively no longer compete with pricing on several of its products; I’ll leave antitrust concerns aside, as I’m unsure as the intricacies at play here. Microsoft is betting that on price parity, its Azure service can compete with AWS. I doubt few would have expected that sort of challenge two years ago.
How is Azure performing? Microsoft informed TNW that the service is used by 200,000 businesses at current count, a figure that is growing by 1,000 daily. That’s a roughly 15% growth rate per month. If that manages to compound, Microsoft will have managed to wrest a decent chunk of the cloud market into its camp.
Happily, for us not on the service side, this competition between Amazon and Microsoft has thus far resulted in cheaper prices and improved service. It’s now Amazon’s move.
Top Image Credit: Robert Scoble