Cloud wars, episode 3: Microsoft cuts Azure prices following price drops from Amazon, Google

awsazureIt seems like Microsoft is keeping up with its promise to cut prices for its cloud services in lockstep with Amazon.

The company announced today that it has made massive cuts to pricing for Microsoft Azure, with compute service prices falling by up to 35 percent, and storage prices dropping up to 65 percent. The changes make Microsoft’s offerings as cheap if not cheaper than Amazon Web Services, and are designed to provide an incentive to try something other than AWS.

In addition to the price cuts, Microsoft is also introducing a new “Basic” instance type that will go live on April 3, and cost 27 percent less than Standard instances, but won’t include auto-scaling or load-balancing. Azure General Manager Steven Martin says that the new instances are “well-suited for production applications that do not require the Azure load-balancer (“bring-your-own load balancer” or single instance), development workloads, test servers and batch processing applications.”

The reductions follow sweeping price cuts from Amazon and Google, which both slashed prices for their cloud services during major press events last week. Amazon’s price cuts are slated to go into effect tomorrow, which is probably part of why Microsoft chose to announce the cuts today. However, the price cuts will go into effect on May 1.

The announcement comes ahead of Microsoft’s Build developer conference in San Francisco, which Satya Nadella said last week will focus on innovations the company has been working on with Windows. It’s particularly appropriate news for developers, who Microsoft hopes will choose Azure over products offered by their competitors.

While these cloud pricing wars may seem somewhat frivolous, Urs Hözle, Google’s Senior Vice President for Technical Infrastructure, said at last week’s Google Cloud Platform Live conference that he expects the company’s cloud services business to easily outpace its advertising business. While public cloud usage is in its infancy today, whichever company can come out on top stands to gain a great deal.

Here are some charts that show how Azure’s prices stack up:

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