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Microsoft Announces Azure Price Cut


In a recent Microsoft Azure blog post, the company announced a price cut due in early February. This announcement follows an Amazon announcement on January 5th, 2016 which saw price cuts to Amazon Web Services (AWS) EC2 C4, M4 and R3 virtual machine instances.

Microsoft’s long standing pricing commitment ensures that Microsoft’s pricing remains in lockstep with AWS pricing for compute, storage and bandwidth.  In this particular round of price cuts, customers can expect price reductions of up to 17% on Azure Dv2 series Virtual Machines (VM). The Dv2 series is the second generation of the D series VM which provides additional 35% faster CPUs over its predecessor. In order to achieve improved performance, Microsoft has opted to use Intel’s Xeon (Haswell) processors.

The discounts extend to both Windows and Linux instances and different instance types as illustrated in the following table.

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While Microsoft is keeping pace with AWS on pricing, they are offering additional capabilities for some VM instances.  Nicole Herskowitz, director of product marketing at Microsoft, explains “it is worthwhile to note that the Azure Dv2 instances - unlike AWS EC2 instances - have load balancing and auto-scaling built-in at no additional charge.”

Herskowitz also goes on to describe how Microsoft uses a different approach to metering a customer’s consumption: “unlike AWS, Azure virtual machine usage is billed on per-minute rate so you only pay for the compute that you use. With AWS you pay for an hour even if you only use a few minutes.”

In addition to more granular billing, Microsoft offers pre-purchase plans that may allow customers 63% cost savings when they pre-purchase their virtual machines for one year.

While Microsoft is focused on driving down costs, they are also looking to drive value to customers through hybrid cloud capabilities and Platform as a Service (PaaS) offerings.  Microsoft claims that more than 50% of Infrastructure as a Service (IaaS) customers are also leveraging PaaS services and are focused on providing a complete cloud platform as Herskowitz explains: “While we’ll continue to offer great low prices, we’re even more proud of offering you a comprehensive cloud platform that helps you innovate faster, no matter where you are in your cloud journey.”

While Microsoft and Amazon generate a lot of attention when these types of price cuts come out, Google also continues to be active in the price war. On January 8th, Google announced a price cut of their own, proclaiming they are 15-41% less expensive than AWS for compute resources.

Regardless of which cloud camp you are in, the major public cloud providers have all started off the New Year ready to compete on price.

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