Microsoft Says Cloud Offering Will Be Price-Competitive

Executive reveals scant details of Microsoft's Azure initiative at an industry conference.

A top Microsoft executive said this week the company will soon disclose the cost to channel partners and customers of its cloud-computing initiative named Azure.

Doug Hauger, Microsoft's general manager of business strategy for cloud infrastructure services, told attendees at the Thomas Weisel Partners 2009 Technology & Telecom Conference that Azure is "a pay-as-you go system [and it will be] very, very price competitive." But aside from that and that fact that more details will be coming "soon", Hauger was scant on details.

His discussion suggested the pricing structure for Azure likely will be a combination of client access licenses priced per machine, per month.

Microsoft (NASDAQ: MSFT) officials introduced Azure at the company's Professional Developers Conference (PDC) in Los Angeles last fall, when the company released a community technology preview.

However, Microsoft officials remain unwilling to discuss actual costs. The cloud market is young, and Microsoft has serious competitors in the space, including Amazon, Google and Salesforce.com.

Cloud Applications

Azure provides an applications services platform "in the cloud" that will run in Microsoft's own datacenters, providing the underlying backbone for applications that run in the computing cloud. The platform will enable developers to create applications that run as services supported in turn by Azure services.

"The Azure Services Platform provides a range of functionality to build applications that span from consumer Web to enterprise scenarios and includes a cloud operating system and a set of developer services," according to a statement on Microsoft's Azure site.

Azure is Microsoft's entry into the Software-as-a-Service (SaaS) arena, although the company refers to its version as software-plus-services in order to emphasize that not all services need to be, or should be, hosted in the cloud.

At last fall's debut of Azure, Microsoft's chief software architect Ray Ozzie told the PDC audience that, because Internet-based companies and their developers deal with many more external users than they serve within their four walls, they need the power to handle exponential growth.

Hauger reiterated that point.

"Azure makes it easier to build applications that scale [by using] physical resources in the cloud," he added. In addition, Microsoft can offer services in the cloud less expensively than a customer could internally, or from a third-party hosting firm other than Microsoft, due to its huge investment in datacenters. "We get the economies of scale with our datacenters," Hauger said.

Azure will host services including Microsoft Live for consumers and Online for businesses such as Exchange, as well as SQL Services, .NET services, SharePoint services and Dynamics CRM.

Partner Ecosystem

Hauger and other Microsoft officials point to the company's huge base of developers who already know how to work in Visual Studio as an advantage over clear competitors like Salesforce.com (NYSE: CRM). He also cited Microsoft's partner community. The combination of those create an actual ecosystem that Microsoft can turn to, not including its own deep pockets.

"The whole 'ecosystem' argument is a good one … there's something like four million .NET developers," said Rob Sanfilippo, research vice president for developer platforms at Directions on Microsoft.

That doesn't mean that compensates for being late to the developing market for online services, however. "I think they're late in getting to the party but that's historically what happens when they enter new markets," Sanfilippo said.

A former 14-year Microsoft veteran himself, Sanfilippo said he has seen Microsoft come from behind too many times in the past, like with Exchange and SharePoint, for him to count the company out with Azure and cloud services.

(This article was adapted from InternetNews.com.)

TAGS: cloud computing,Microsoft,SaaS,Azure,Salesforce.com



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