Amazon vs. Microsoft: Azure Matches AWS Pricing

Microsoft (MSFT) has reduced the pricing of its cloud-based storage to counter the recent price reductions announced by Amazon (AMZN) Web Services (AWS). According to Microsoft, the new Windows Azure pricing makes its storage cheaper than AWS.

In what is becoming practically a game of leapfrog, this price change comes as no surprise. When Amazon announced pricing changes to its Elastic Block Store (EBS) and Simple Storage Service (S3) last week, it was expected competitors would step fairly quickly. It didn't take Microsoft long to announce its own price cuts.

Steve Martin, general manager of Microsoft Windows Azure strategy, wrote in a blog post that Microsoft would reduce the price of Block Blobs Storage (BBS) and Disk/Page Blobs Storage (DPBS), effective March 13. The pricing will go into effect worldwide, and Martin claimed it "means that Azure storage will be less expensive than AWS in many regions."

Microsoft's main goal is counter the pricing structures of Amazon's U.S. East (Northern Virginia) data center. The Redmond-based company will be reducing prices by up to 20 percent and making that pricing available around the world. Amazon's pricing structure varies by region, and typically U.S. East is the cheapest region.

"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 wrote. "We are deeply committed to maintaining market leading price-for-performance and providing best in class reliability/scalability."

We've mentioned before on Talkin' Cloud that these price wars are going to become even more commonplace as cloud continues to catch on. It's a reality that partners of all cloud providers must get used to; and honestly, there doesn't seem to be a bottoming out of prices in the near future, particularly in commodity plays that offer very little margin to begin with.

Martin is right about one thing, for sure. At the average pricing of the average commodity cloud storage service, price is only one factor. It may be an important one, but it's the value wrapped around those services that will keep customers happy and looking to increase their cloud footprint with higher value services.

Expect other cloud storage providers to follow suit pretty quickly.