Microsoft Azure Pricing Adds to Cloud Confusion

The long awaited Microsoft Azure pricnig model was announced recently. For a while I really thought Microsoft would use its fashionably late arrival to Cloud Computing to build upon the short comings of other vendors and maybe take advantage of the opportunity to establish a leadership position in Cloud Pricing. Alas, yesterday I discovered that Microsoft will instead add to the confusion when it comes to Cloud Pricing. Here is a snippet of what they announced:

Azure pricing is a disappointment on three counts:

  1. It isn’t true utility or consumption computing pricing because the customer will not end up paying for what they actually use. Compute and Storage hours are a mistake because it presumes the full consumption of compute unit for any part of 1 hour. The customer doesn’t realize it but they are paying for computing resources they aren’t necessarily going to use. This is the hidden margin for players like Microsoft and AWS. While the customer watches the left hand, the right hand is busy taking money right out of the customer’s pocket! This pricing model is the equivalent to the old salami banking scam. Take fractions of cents from a billion accounts and think nobody will notice.
  2. It will not support the migration from legacy operating models to cloud operating models. I’ve written about this phenomenon before, but it seems like the big cloud players are dramatically out of touch with the average customer. This pricing model means nothing to the customer but a bunch of numbers. How does this pricing model translate to what the average customer doe today in their enterprise?
  3. There is absolutely zero predictability. And if there is, it sure as heck isn’t simple enough. Can someone tell me what the cloud will cost me for 15 .Net applications I have built before I get an actual invoice from Microsoft? Hold on, let me call my MIT laureates and Actuarial PHd’s to do some predictive billing!

I will say that Microsoft, unlike a lot of other cloud platforms on the market has smartened up to the fact that they need to account for Storage Transactions. Storage transactions can be the silent killer of cloud computing infrastructure. The only problem of course is understanding what that means to my application. How the heck do I know how this translates to a real world operation?

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2 responses to “Microsoft Azure Pricing Adds to Cloud Confusion

  1. John, you make some good points here and raise a few questions I want to help address. Up front I should clarify that we are still in the early stages from a product perspective and in terms of the business model. I suspect we will continue to see significant innovation on both of these fronts in the industry and this feedback is very helpful.

    I understand your point on compute hours. The reason we are currently approaching in this form is if the app is deployed we are effectively setting aside those computing resources to ensure your application maintains the high availability commitment we are making in our SLA. There is value in having an application available to be consumed by your users, and there is cost for those resources which helps shape our pricing structure.

    There is significant demand for this pay as you go consumption model–but we know one model does not work for everyone so we will introduce subscription offers to give the option of a predictable payment.

    Platforms as a service introduce fundamentally different usage and pricing models. At the same time there is tremendous value to being able to rapidly bring a new application to market at a fraction of the time and cost it would take traditionally. There is a learning curve for all of us as platform as a service becomes mainstream. As we bring Windows Azure to market we will help our customers think through the changes, and we will listen to the feedback and continue to innovate both our service and business model.

    Matt Rogers – Microsoft
    Windows Azure

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