Microsoft announced Thursday another round of price cuts for Azure public cloud. This is despite indications from Google that the price war between them, Amazon Web Services Inc. (AWS), and Google may be nearing a truce.
The price reductions that affect Azure Dv2 Virtual machines are a direct result of AWS’s move last week to lower several Elastic Compute Cloud instances (EC2) prices by up to 5%.
Microsoft is also reducing the cost to run Azure Dv2 instances under Linux and Windows Server by up to 17 percent. The new Azure Dv2 pricing will go into effect in the first month of next year.
Microsoft provided the following table as an example to illustrate the reductions in its U.S. East2 (Virginia), region.
Virtual Machine Type Price Reduction for Windows Server Instances. Price Reduction for Linux Instances. D1-D5 v2 10% 14%. D11-14 v2 13% 7%. Microsoft also stated in its announcement that “Azure EC2 instances, unlike AWS EC2 instances, have load balancing (and auto-scaling) built-in at no additional cost.” This means that Azure offers even more value.
Although AWS remains the market leader in public cloud space, Microsoft Azure is considered to be the closest viable competitor in terms cost, geographic scope, customer base, and cost. Microsoft has not made any secret of its policy of matching AWS’s price cuts with its own price reductions. The company stated that Thursday’s price reductions reflect Microsoft’s “longstanding commitment” to match AWS’s commodity cloud pricing.
Microsoft emphasized other benefits of Azure over AWS.
“Customers with Enterprise Agreements not only get price cuts like these but also your price points are lower — in many instances well below AWS pricing — reaffirming our commitment to being the number one enterprise cloud.” The company stated that Azure virtual machine usage is billed per-minute so you only pay what you use. AWS charges an hour even if you use it for only a few minutes.
Google, which has also participated with AWS and Microsoft in retaliatory pricing strategies, responded to AWS price cuts late last week by a statement declaring that it is “the price/performance leader” in public cloud.
Ironically, the current back-and forth between AWS, Microsoft, and Google over cloud pricing occurs just as a new study suggests that cloud costs are more stable today because of intense price competition in recent years.
According to the report by Tariff Consultancy (TCL), “In 2016, the cost for the public cloud appears have reached a price point that is now relatively stable.”