Cloud Rumble: Microsoft Responds To AWS, Drops Azure Prices

Answering rival Amazon Web Service's latest salvo of price cuts, Microsoft on Friday said it would slash prices for a popular category of Azure public cloud instances.

New price points across the latest version of Azure D-series (Dv2) virtual machines -- which offer fast Intel Xeon (Haswell) processors, more memory than standard instances, and SSD drives -- will go into effect sometime in early February.

Microsoft didn't shy away from acknowledging the driver for its latest reductions: "As part of our promise to deliver the best customer value on Azure, we have had a longstanding commitment to make our prices comparable on commodity services like compute, storage, and bandwidth relative to Amazon Web Services," said Nicole Herskowitz, director of product marketing for Microsoft's cloud platform, on the Azure blog.

[Related: AWS Delivers More Price Cuts To Ring In 2016]

Microsoft's intent to lower the cost of Dv2 virtual machines was unveiled 10 days after AWS reduced prices for EC2 instances running standard Linux distributions by 5 percent. Amazon introduced smaller reductions for VMs running Windows or two premium Linux distributions -- SUSE and Red Hat Enterprise Linux.

Microsoft publicly committed to matching AWS prices for commodity cloud services almost three years ago.

As an example of the savings customers will see, Microsoft said that some D-series instances running the Windows Server operating system will be 10 percent cheaper, others 13 percent.

Linux instances will deliver even bigger savings -- from 14 to 17 percent. Microsoft recently revealed that more than 20 percent of Azure VMs are running Linux rather than Windows, representing a major philosophical shift for the software giant.

The blog post announcing the price reductions illustrates Microsoft's laser focus on the only public cloud provider it hasn't surpassed.

Herskowitz said that -- as opposed to Amazon's EC2 instances -- the Dv2 ones offer load balancing and auto-scaling at no additional charge. They also differ by billing usage at a per-minute rate, she said.

The world's two largest clouds greatly consolidated their market leadership in 2015.

Ben Mead, cloud and infrastructure lead at Credera, a Dallas-area Microsoft partner, told CRN that Microsoft and Amazon are constantly improving on price, performance, scale and capability in ways that no internal IT organization could achieve in isolation.

The Microsoft and Amazon price cuts "represent the real world culmination of the promise of cloud computing’s commercial model -- that equal or better performance, security and availability can be achieved by the world's two leaders in cloud solutions," Mead said.

"Bravo to these two behemoths for continuing to push the cost of adoption of hyper-scale cloud computing services lower year after year," Mead told CRN.

PUBLISHED JAN. 15, 2016