Microsoft Azure Cloud Service Challenges Amazon On Price, Reliability

Microsoft also said it's reducing the costs of its virtual machines and cloud services by 21 to 33 percent, promising to match Amazon Web Services (AWS) prices for cloud compute and storage services.

Microsoft partners that have been working with the cloud infrastructure services during its lengthy trial period say the move will help them offer customers lower-cost cloud application and development/testing services that promise higher reliability and uptime than on-premise IT.

[Related: Microsoft Acquires Cloud Monitoring Startup MetricsHub ]

"It really does allow you to be more agile as an organization," said Reed Wiedower, CTO at New Signature, a Washington, D.C.-based solution provider that partners with Microsoft. As for the price cuts: "We've seen significant cost reductions across the board in the last one or two years with Azure," he said.

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While Microsoft is a player in the platform-as-a-service and software-as-a-service arenas, the general availability of Windows Azure Infrastructure Services puts Microsoft squarely in the IaaS market. The service allows businesses to move their Windows Server- and SQL Server-based virtual machines running on Microsoft Hyper-V -- and the applications running on those VMs -- to the cloud.

Microsoft has been providing the Azure IaaS service in preview mode since June. But, the general availability announcement means businesses can subscribe to the Azure IaaS service and get support and service-level agreements (SLAs) of 99.95 percent uptime.

"No one wants their VMs to fail. Effectively, I don't have to worry that my virtual machines will go down," Wiedower said, noting that New Signature is an Azure Circle partner and has been working closely with Microsoft on Azure development projects. "The Azure virtual machines are designed from the ground up to be fault tolerant. Microsoft has done a really good job in the last eight or nine months in detailing how their virtual machines work."

There are currently more than 200,000 Windows Azure customers, according to Microsoft, and about 1.4 million virtual machines have been uploaded to Azure Infrastructure Services since the preview became available. But, Microsoft has a long way to catch up with AWS, which launched in 2006.

In a blog post, Bill Hilf, Microsoft general manager of Azure product management, said the new Azure service offers high-memory 28-GB/4-core and 56-GB/8-core virtual machine instances for running heavy-duty workloads. Also new are validated instances for SQL Server, SharePoint, BizTalk Server and Dynamics NAV, among other Microsoft software.

Wiedower said Microsoft's new azure service fits with increasing demands he's seeing for cloud-based development and test services that can cost far less than on-premise test and development projects. And, the New Signature CTO said he's also seeing more demand from businesses that want to run Microsoft Active Directory in the cloud.