Microsoft Mum on Seeing Green From Azure

Microsoft hasn’t revealed yet how much its cloud services — named Azure — will cost customers and partners, but the company plans to reveal that information in the near future, an executive told financial analysts Wednesday.

That disclosure came while Doug Hauger, general manager of business strategy for cloud infrastructure services, briefed attendees at the Thomas Weisel Partners 2009 Technology & Telecom Conference regarding the technology.

Microsoft (NASDAQ: MSFT) officials introduced Azure at the company’s Professional Developers Conference (PDC) in Los Angeles last fall, when it released a community technology preview.

One thing that Microsoft officials have been unwilling to discuss so far, however, is what it will all cost. After all, the market is young and Microsoft has serious competitors, including firms like Amazon and

“Soon,” Hauger responded when asked when Microsoft will be giving out that information. “It’s a pay-as-you go system [and it will be] very, very price competitive,” he added. From his discussion, however, it sounded as if the pricing structure will likely be a combination of client access licenses priced per machine, per month.

Azure provides an applications services platform “in the cloud” that will run in Microsoft’s own datacenters, providing the underlying backbone for applications that run in the computing cloud. The platform will enable developers to create applications that run as services supported in turn by Azure services.

“The Azure Services Platform provides a range of functionality to build applications that span from consumer Web to enterprise scenarios and includes a cloud operating system and a set of developer services,” according to a statement on Microsoft’s Azure site.

Azure is Microsoft’s entry into the software-as-a-service arena, although the company refers to its version as software-plus-services in order to emphasize that not all services need to be, or should be, hosted in the cloud.

At last fall’s debut of Azure, Microsoft’s chief software architect Ray Ozzie told the PDC audience that, because Internet-based companies and their developers deal with many more external users than they serve within their four walls, they need the power to handle exponential growth.

Hauger reiterated that Wednesday.

“Azure makes it easier to build applications that scale [by using] physical resources in the cloud,” he added. In addition, Microsoft can offer services in the cloud less expensively than a customer could internally, or from a third-party hosting firm other than Microsoft, due to its huge investment in datacenters.

“We get the economies of scale with our datacenters,” Hauger said.

Azure will host services including Microsoft Live for consumers and Online for businesses such as Exchange, as well as SQL Services, .NET services, SharePoint services and Dynamics CRM.

Hauger and other Microsoft officials point to the company’s huge base of developers who already know how to work in Visual Studio as an advantage over clear competitors like (NYSE: CRM). He also cited Microsoft’s partner community. The combination of those create an actual ecosystem that Microsoft can turn to, not including its deep pockets.

“The whole ‘ecosystem’ argument is a good one … there’s something like four million .NET developers,” Rob Sanfilippo, research vice president for developer platforms at Directions on Microsoft, told

That doesn’t mean that compensates for being late to the developing market for online services, however. “I think they’re late in getting to the party but that’s historically what happens when they enter new markets,” Sanfilippo said.

A former 14-year Microsoft veteran himself, Sanfilippo said he has seen Microsoft come from behind too many times in the past, like with Exchange and SharePoint, for him to count them out with Azure and cloud services.

However, he did issue a caveat to developers thinking about moving existing applications to the cloud via Azure: It’s likely not going to be as easy as a quick recompile and it’s done.

“I think there’s a lot of rewriting that goes on,” Sanfilippo added.

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