Microsoft Azure Enters Cloud Price War

By Pedro Hernandez

Microsoft has reacted quickly to the large cloud pricing cuts made recently by rivals Google and Amazon.

Google and Amazon had sparked an “insane” cloud services price war last week, sending the cost of storing data and placing computing workloads on their respective clouds plummeting. Google cut the cost of its services by 32 percent to 85 percent, depending on the offering, while Amazon announced its “42nd price reduction since 2008” in its Amazon Web Services Blog.

Price Cut

Now, it’s Microsoft’s turn. Steven Martin, general manager for Microsoft Azure, said in a blog post that by sticking with his company’s “previously announced commitment to match Amazon on prices for commodity services, we are cutting prices on compute by up to 35 percent and storage by up to 65 percent.” Describing economics as “a primary driver for some customers adopting cloud,” he said customers can expect Azure “to match prices and be best-in-class on price performance.”

Economics alone don’t dictate success in the cloud, argued Martin. “While price is important, and something that will continue to grab headlines, there are three key factors at play in cloud computing: innovation, price, and quality.”

Martin said Microsoft is delivering on the innovation and quality aspects with “massive investments in cutting-edge infrastructure and world-class R&D.” Further, the company has pledged to continue to expand on its developer and partner ecosystems.

As part of Microsoft’s lower-cost approach to cloud computing, the company will introduce a new class of Azure Virtual Machines. The general-purpose instances will be labeled “Basic” and will offer “similar machine configurations as the Standard tier of instances offered today (Extra Small [A0] to Extra Large [A4]).”

Basic instances will cost 27 percent less than the “corresponding instances in use today,” now called “Standard,” and will not offer load balancing or auto-scaling, informed Martin. Other changes include an up to 35 percent reduction in the cost of Linux-based Memory-Intensive Instances and up to 27 percent for Windows.

Storage Cuts

On the cloud storage front, Martin announced that Microsoft “is reducing our Block Blob storage pricing by up to 65 percent for LRS [Locally Redundant Storage] and up to 44 percent for GRS [Geo Redundant Storage], effective 1 May.” His group is also introducing a redundancy level called Zone Redundant Storage (ZRS).

Expected to arrive in the “coming months,” ZRS will enable customers to store the “equivalent of 3 copies of your data across multiple facilities,” which can be in the same region or span across two regions where Microsoft operates its cloud data centers. ZRS will carry a 37.5 percent lower price tag than GRS, said Martin.

In addition, Microsoft is working on region-specific pricing. “Some workloads require specific placement while others are not as dependent on location,” Martin said. A new region-based pricing strategy “will help customers save additional money for workloads that have deployment flexibility,” he said.

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Originally published on eWeek.