Microsoft plots latest assault in cloud price war

Vendor slashes compute and storage prices by 35 per cent and 65 per cent respectively

Microsoft has plotted its latest move in the cloud price war by slashing its compute and storage costs by 35 per cent and 65 per cent respectively.

Last week, Google reignited the tussle for customers' cash by cutting its compute and storage prices by 32 per cent and 68 per cent, matching that of rivals Amazon and Microsoft. The former then responded by taking an axe to the base price of its infrastructure and compute services – trimming them by 51 per cent.

In a blog post published today ahead of its Build developers' conference, Microsoft announced its latest round of cuts, claiming cloud commoditisation is kicking in.

From 3 April, Microsoft will introduce a Basic pricing tier for its virtual machine (VM) General Purpose products which will cost 27 per cent less than its current offering, which will be rebranded Standard as the changes come in.

"Basic instances will have similar performance characteristics to AWS' [Amazon Web Services'] equivalent instances while the Standard instances will maintain their favourable performance," said Martin.

Its Memory Intensive VM products' prices will be cut by 35 per cent for Linux environments and 27 per cent for those running on Windows from 1 May.

The vendor's general manager for Windows Azure, Steven Martin, said price will always be an important factor when considering cloud, but insisted its main differentiator was quality.

"We recognise that economics are a primary driver for some customers adopting cloud, and stand by our commitment to match prices and be best in class on price performance.

"While price is important, and something that will continue to grab headlines, there are three key factors at play in cloud computing: innovation, price, and quality. Innovation and quality will prove far more important than commoditisation of compute and storage.

"With the pricing announcements out of the way, we can get back to innovation and quality."

Martin added that Microsoft was keen to speak up about the price cuts ahead of Build.

"I've yet to meet a developer who travels just to hear about pricing updates, so you won't see us take the stage at Build and use the opening moment to announce a price cut," he said. "[Developers] don't travel because they like airline food."