awsazureMicrosoft this morning followed through on its promise to match Amazon Web Services’ prices for commodity cloud computing services, saying that it will be reducing its pricing for its Windows Azure cloud storage by as much as 20 percent.

The move comes three days after AWS announced that it would be reducing its storage prices for Amazon Elastic Block Store (EBS) and Amazon Simple Storage Service (S3), touting the move as the 40th price reduction since Amazon Web Services debuted in 2006.

The jousting between the companies reflects Amazon’s willingness to maintain thin profit margins as it grows its cloud business. It also demonstrates the competitive challenge that Microsoft will face as its business continues to expand beyond traditional server software into the cloud.

In a blog post announcing the move this morning, Microsoft said its prices for cloud storage will actually be less than Amazon’s in some regions around the world.

Microsoft has been going after Amazon’s traditional cloud customer base and trying to get more startups to use Windows Azure.

 

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