Microsoft matches Amazon and Google’s cloud services price drop with deep discounts and new services

Microsoft Corp. fired its latest salvo in the cloud services price war yesterday with the announcement that it is drastically cutting the price of its Azure cloud compute and storage fees by as much 65 per cent.

The company also said it is introducing a new tier of general purpose services and will shift to a region-specific pricing to further help customers save money.

Steve Martin, general manager for Azure, made it quite clear that the Microsoft’s latest move was meant as a challenge to cloud services rival Amazon Web Services. AWS lowered the price of its cloud services last week just one day after Google cut the price of its own cloud services.

“Consistent with our previously announced commitment to match Amazon on prices for commodity services we are cutting prices on compute by up to 35 per cent and storage by up to 65 per cent,” Martin wrote in a blog post. “We recognize that economics are a primary driver for some customers adopting cloud, and stand by our commitment to match prices and best-in-class on price performance.”

He also announced that a new general purpose instances tier called Basic will be available on Thursday. The new tiers will offer similar machine configurations as those available on the company’s current Extra Small and Extra Large tiers.

The older tiers will also now be called Standard.

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The new tier however will cost up to 27 per cent less that the current instances. They do not have load-balancing or auto-scaling features which are included in the Standard tiers.

“These instances are well-suited for production applications that do not require Azure load-balancer (‘bring-your-own load balancer’ or single instance), development workloads, test servers and batch applications,” said Martin. “basic instances will have similar performance characteristics to AWS;s equivalent instances while the Standard instances will maintain their favourable performance.”

Martin said Microsoft is also reducing its Memory-Intensive Instance prices by up to 45 per cent for Linux instances and up to 27 per cent for Windows instances effective May 1.

Block Blob storage pricing is will also be reduced by up to 65 per cent for locally redundant storage (LRS) and up to 44 per cent for geo redundant storage (GRS) effective May 1.

The company announced a new redundancy level for Block Blob called Zone redundant Storage which will be available in the coming months. ZRS will be priced 37.5 per cent lower than GRS.

Currently, customers use GRS to keep their data in two regions which are hundreds of kilometres apart. The system enables the storage of an equivalent of six copies (three copies in each region) of data.

“The ZRS will enable users to keep data durable by storing an equivalent of three copies of your data across multiple facilities,” Martin said. “These facilities may be within the same region or across two regions.”

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