Microsoft Cuts Azure Prices to Compete with Amazon Web Services

Microsoft (NASDAQ: MSFT) is lacing up its gloves to take on Amazon (NASDAQ: AMZN) Web Services with the launch of Windows Azure Infrastructure Services and a commitment to complete with AWS on price.

As Bill Hilf, Microsoft general manager of Product Management for its cloud computing platform, noted in a blog post, customers don’t want to have to choose between low price and good performance; they want both in one package. And that’s Microsoft is hoping to deliver with price cuts to match AWS’s pricing on commodity services such as compute, storage and bandwidth. In some cases, that means pricing as low as pennies for cloud services.

Hilf wrote that the price matching begins with the slashing of dollar signs on virtual machines and cloud services by 21 percent to 33 percent. He also hinted that Microsoft is making these pricing changes because of customer concerns that Azure was more expensive than Microsoft’s competitors. Well, that does seem to be the case if Microsoft has to slash prices to compete with AWS on pricing.

This isn’t the first time Microsoft has cut prices to compete with AWS. In December, Microsoft cut its cloud storage pricing to contend with AWS and Google (NASDAQ: GOOG). Last March, Microsoft made a similar cut.

As for Windows Azure Infrastructure Services, the goal is to provide customers with scalable on-demand virtual infrastructure so organizations can extend their data centers to the cloud in a secure manner. According to Hilf, the new services are about providing IaaS and PaaS, as well as “hybrid cloud scenarios.”

“We recognize customers have a choice, and that’s why today, we are making it as easy as possible to have it all—a complete hybrid cloud platform, great support, without a price barrier,” Hilf wrote in the blog post.

Microsoft continues to look for ways to compete directly with its biggest competitors, and if it can match pricing and performance, then customers may truly have to make a choice. Both Microsoft, AWS and Google all have their wins when it comes to customers. A good question, though, is: How much does price matter to customers? Weigh in below if you have thoughts on the matter.