Microsoft Azure Prices: Similar to EC2 on some, different on others

Today, Microsoft announced pricing for Azure (which isn't open for business yet) on their Azure Windows MSDN blog. Here are some of the basics:

Windows Azure

• Compute @  $0.12 / hour
• Storage @ $0.15 / GB stored
• Storage Transactions @ $0.01 / 10K

SQL Azure:

• Web Edition – Up to 1 GB relational database @ $9.99 per month
  
• Business Edition – Up to 10 GB relational database @ $99.99 per month
  

NET Services:

• Messages @ $0.15/100K message operations , including Service Bus messages and Access Control tokens

As you might expect, the compute model is similar to EC2 in that the pricing is "per hour" and per GB. The missing part in the model is the size (or type in EC2 terms) of the compute platform. I would expect Microsoft to augment pricing for compute based-on the amount of compute resources an application requires. I don't think Microsoft would allow an applications that requires 5x the amount of memory or CPU time to be the same price as another application with lesser requirements. There must be tiers at some point. Nothing is infinitely scalable.

Transactions, which I think will translate to I/O, are similar as well -- although Amazon is cheaper (more I/O per cost). The SQL and .NET services are different, as to be expected, since Azure is more of a full featured PaaS.

What I found interesting was this statement:

While consumption based pricing provides great flexibility we have also heard it introduces a level of unpredictability and some customers prefer other options. At launch we will share details of subscription offers that provide payment predictability and price discounts that reflect levels of usage commitment.

Burton Group has been saying that we believe that IT organizations need more predictable cloud costs. Some organizations have no idea how much cloud services they are consuming until the bills start to trickle in. IT governance will demand that predictable cost controls be put in place. An "all you can eat within limits" model seems to fit the bill. This could be a good move by Microsoft.

If I had one piece of advice for Microsoft it would be regarding this statement:

To support partners’ and customers’ complex business needs we are providing an enterprise-class guarantee backed by a service-level agreement that covers service uptime, connectivity, and data availability.

Microsoft, please do these things regarding the SLAs:

• Be exhaustive. Don't insult our intelligence with a 1 page SLA. SLAs need to cover more areas than three areas. Things like contingencies, abatements, and service response, need to be covered too.
• Build in some flexibility. An enterprise-class guarantee requires some flexibility. One-size boilerplate SLAs do not fit all.
• Make a machine readable, XML SLA format, complete with the ability to sign and negotiate programmatically. Doing so will speed up automation.

[posted by: Drue Reeves]

Comments

[Ana Rodriguez]

Wow I didn’t know the prices! Thanks for the data and the great article, I enjoyed reading it. I think we are taking a step forward to a new era of technology; companies should start moving to cloud computing and develop their applications towards it. The real deal is will they know the true value of cloud computing?

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[Drue Reeves]

Ana,

Thank you for the comment. I agree, the real deal is determining business value of any cloud service one might use. This requires IT organizations to do their homework to comprehend which applications are suitable for the cloud, and those that are not. A business impact analysis is required.

Drue

[William Louth]

You will only be able to manage costs once you can measure them and relate them to activities that are to some degree under control.

What customers need is a standard metering interface (note: metering != billing) so that changes in underlying meters can be tracked back to one of more cost center hierarchies some of which can be operational (code/system level) others business (service entry points) and user based (user/department/organization/corporation).

An augmented Activity Based Costing solution with a flexible & versatile multi-resource metering model can achieve this.

A Unified Approach to Performance Management and Cost Management for Cloud Computing
http://www.jinspired.com/products/jxinsight/meteringthecloud.html

ABC for Cloud Computing
http://williamlouth.wordpress.com/2009/01/27/abc-for-cloud-computing/

William