Microsoft is stepping up its cloud game. On Tuesday, the technology company launched its Azure Infrastructure Services, a head-on competitor with Amazon Web Services.
The service has been in preview mode since last summer, and this is its official launch. The new Azure Infrastructure allows companies to deploy a wider range of applications with greater control. Additionally, the service will now offer high memory instances of as much as 28 and 56 gigabytes.
The company announced cuts in its prices for such services as virtual machine instances or platform-as-a-service that range from 21 percent to 33 percent, and it has committed to matching AWS prices for computing, storage and bandwidth. Microsoft said the prices will be matched even if AWS cuts its own. Bill Hilf, general manager for Windows Azure product marketing, told news media that the price cut is designed to counter any perceptions that Azure is more expensive than AWS.
Even before this official launch, Microsoft has steadily been strengthening Azure's capabilities. Last month, for example, it added support for Dropbox, Hadoop and PhoneGap.
This new infrastructure-as-a-service, or IaaS, can provide a virtual hosted environment as might exist in a data center, in addition to Azure's previous offering of platform-as-a-service, which provided an OS, storage and connectivity. Microsoft said that Azure has over 200,000 customers, and 1,000 new ones are signing up every day, but currently the service is estimated to take in about half the annual revenue of AWS.
Industry observers have noted that, to survive in the increasingly competitive cloud services market, Microsoft needed to offer IaaS. Microsoft is expected to pitch the expanded Azure as another dimension of its virtual, Windows Server-based environments.
A recent Forrester Research survey found that 71 percent of respondent companies use AWS for cloud computing, with only 10 percent for Microsoft or Google, each. Gartner has said that public cloud services increased by one-fifth in revenue in the last year, to more than $100 billion.
AWS Versus Microsoft
Charles King, an analyst with Pund-IT, noted that "Amazon is obviously the first mover" in providing these kinds of infrastructure cloud services for businesses. He added that there has been "a sense in the industry that enterprises are hesitant to embrace cloud computing because of security" and other issues, but one of the exceptions is AWS.
"The price/performance benefits" at AWS are so attractive, King said, that "they've tipped the balance in AWS's favor." But, King noted, the rise of x86 servers in the data centers has made Microsoft's Windows Server "the 800-pound gorilla," so offering cloud-based services "from the same vendor could be very attractive."
He added that IBM, Dell and VMware in particular are building out their cloud-based infrastructure services, and, given that businesses tend to be comfortable "working with vendors they trust" such as these companies, the "market is going to get more crowded soon."