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Microsoft Invites Amazon to IaaS Brawl

Microsoft Invites Amazon to IaaS Brawl

Microsoft is ratcheting up the cloud competition with a new IaaS offering that directly challenges Amazon Web Services. The move signals an important change of attitude in Redmond: an admission, perhaps better late than never, that the era of on-premises applications is winding down. It's likely Microsoft will pitch the new Azure service first to its existing customer base, leveraging relationships by invoking the trust it's established over the years.

By Erika Morphy CRM Buyer ECT News Network
04/18/13 5:00 AM PT

Microsoft this week announced general availability of Windows Azure Infrastructure Services. The Infrastructure as a Service offering previously had been in limited release.

The cloud service lets users deploy full virtual machines created from a gallery of pre-populated templates built into its management portal. Users also have the option of uploading and running their own custom images.

The built-in image gallery of VM templates includes Windows Server 2012, Windows Server 2008 R2, SQL Server, BizTalk Server and SharePoint Server. However, it includes Linux images as well -- Ubuntu, CentOS and SUSE Linux distributions.

Microsoft sent a direct shot across Amazon's bow by offering to match its prices for commodity compute, storage and bandwidth services. What this means in practical terms is that Microsoft will start reducing its general availability prices on virtual machines and cloud services by 21-33 percent.

This is telling, not only because it illustrates Microsoft is ready to take on Amazon Web Services, but also because it amounts to an acknowledgment that the desktop era is on its way out, and cloud services are in.

Uphill Climb

Microsoft has an uphill climb if it intends to make good on its Amazon challenge, Charles King, principal of Pund-IT, told CRM Buyer.

"The pricing recognizes that Amazon is the player to beat right now," he said.

To the chagrin of its competitors, Amazon has developed a pristine reputation in the corporate arena, King continued. "Even among companies that have been resistant to adopting the public cloud for basic business functions or processes, they seem to carve out an exception for Amazon."

Many of these same "anti-cloud" companies have no trouble using AWS for product development or other core functions, he said.

The Existing Relationships Card

What Microsoft has to its advantage is its huge installed base among companies in the desktop and data center space, King said.

"What I believe Microsoft will try to do here is to leverage the relationship they already have as a data center solution provider of choice, and try to extend those relationships to include Azure," he predicted. "The pitch is 'you trust us in the data center, you trust us on the desktop, so why not trust us in the cloud as well? And by the way, you won't pay a nickel more than you would with Amazon.'"

Indeed, Microsoft took pains to highlight its early adopter corporate users' experiences -- emphasizing its own corporate computing bona fides at the same time.

"It certainly is a viable argument," King said. "It could very well work."


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