Redmond is swinging back after Amazon’s cloud services pricing punch last week. Based on its April announcement committing to match AWS prices for commodity services like compute, storage and bandwidth, Microsoft had to respond -- and it did.
Microsoft promised customers lower prices for Block Blobs Storage and Disks/Page Blobs Storage, matching AWS’ prices, beginning on March 13. Amazon Web Services (AWS) recently launched a faster, lower-cost data warehouse within its Redshift warehouse service.
What’s more, according to Steven Martin, general manager for Windows Azure, the company is making the new prices effective worldwide -- and he said that means Azure storage will be less expensive than AWS in many regions.
Who’s the Least Expensive?
Here’s the deal: Azure is matching AWS’ lowest prices in the U.S. eastern region for its S3 line of cloud storage services and EBS (Elastic Block Store), which provides persistent block storage for use with Amazon EC2 instances, by reducing prices by up to 20 percent and making the lower prices available in all regions worldwide. Microsoft is also reducing the price of Azure Storage transactions by 50 percent for Locally Redundant Disks/Page Blobs Storage.
“While we know that price really matters for these commodity services, we also know that it is not just a price decision, it’s also about great performance, reliability and scalability,” Martin said in a blog post. “We are deeply committed to maintaining market leading price-for-performance and providing best in class reliability/scalability.”
Martin said customers can get highly durable volumes on their virtual machines with no additional charge, which makes Azure less expensive than its competition. He pointed out that Azure IaaS Disks are $0.095/GB-month with Geo Redundancy. With AWS in order to get high durability of VM disks, he said, customers have to pay the price of both EBS Standard Volumes ($0.05/GB-month) and EBS Snapshot to S3 ($0.095/GB-month), which is 34 percent more expensive.
Open Standards Breed Choice
We caught up with Brad Shimmin, a principal analyst at Current Analysis, to get his take on the price wars. He told us if we were having this discussion a couple of years ago it would be a platform decision -- enterprises are either going to buy into Amazon technology or buy into Microsoft technology.
“With the open standards we’re enjoying right now and the high level of use of virtualization, it’s almost irrelevant,” Shimmin said. “The decision is coming down to the things like the geographic location of data centers and how much control the customer has over its data, as well as price. Issues like finite security, governance and management issues that go into deciding where you are going to deploy your apps.”
Shimmin said cloud storage players are working to capitalize on economies of scale in their data centers. He pointed to IBM’s SoftLayer acquisition -- and the revenue stream it generates and the breadth and diversity of the customer base -- as proof that if you build a big enough data center you can essentially serve any market.
“In the case of software, for instance, you have a huge gaming industry that’s built a backbone on top of SoftLayer sitting right next to a very traditional button down business operation for hosting line of business application and data,” Shimmin said.
“So it is a heady time for these cloud vendors. The ones that might get hurt are the smaller pure plays, but the old guard -- companies like SunGard -- have built solid reputations supporting ISVs and enabling the cloud revolution, if you will, with pricing that allow small businesses to build software solutions delivered via the cloud affordably. That has and will continue to drive the whole business landscape for IT," he added.