Ballmer Works the Partners as Azure Gets Pricing

Microsoft CEO Steve Ballmer
CEO Steve Ballmer speaks during Microsoft’s Worldwide Partner Conference. Source: Microsoft

Microsoft revealed pricing for the company’s upcoming Azure cloud computing services on Tuesday, while its CEO worked to pump up partners in the face of a continuing down economy.

Bob Muglia, president of Microsoft’s (NASDAQ: MSFT) server and tools division, described the pricing model during his keynote at the company’s Worldwide Partner Conference 2009 in New Orleans.

Following Muglia onstage, CEO Steve Ballmer worked to try to assure the more than 6,000 partners in attendance that the economy will “reset” and grow, but with a difference.

“This is going to be an IT-driven period of growth,” Ballmer said, and despite the tough economy, Microsoft will stay the course on its investments.

“We will keep our R&D budget flat next year — $9.5 billion in aggregate [and] more than any other company in the world,” Ballmer added. “We will use the same old Microsoft approach — long-term and partner-focused.”

The update on Azure, the company’s new cloud computing platform — and a key initiative that’s one being closely watched by partners, customers and rivals, — had been expected since February, when Microsoft teased that it would disclose pricing “soon.”

After coming to cloud computing late, Microsoft is now making a push to get partners and third-party developers to commit to using Azure, which is designed to run in massive datacenters worldwide. It’s also designed to compete with cloud service offerings from (NASDAQ: AMZN), (NYSE: CRM), and others.

Azure is a component of Microsoft’s evolving software-plus-services strategy — its version of software-as-a-service — that aims to keep its desktop software relevant at the same time that it offers extensive services over the Web, some for free and some on a consumption-based pricing model.

“It’s hard today to build out scale and applications,” Muglia told attendees at his keynote speech Tuesday. “The cloud is a combination of the infrastructure play and the applications … Microsoft is committed to providing the cloud environment.”

Microsoft announced Azure last fall at its Professional Developers Conference (PDC) in Los Angeles, and released a “technical preview” of the service at that time. The platform is still in its preview phase.

As Muglia described it, partners and customers can build applications and services on top of Azure for free, beginning now. However, by the time that the next PDC rolls around in Los Angeles, Nov. 17 through 19, Microsoft will begin charging for usage.

Pricing for the core Azure computing service will cost $0.12 per hour, $0.15 per gigabyte of storage, plus $0.10 per 10,000 storage transactions, topped off with a bandwidth charge of $0.10 per gigabyte in and $0.15 per gigabyte out.

The company is also offering a 5 percent promotional discount to Microsoft Partner Network members on some core services, it said.

For users who need database services, Microsoft will offers those à la carte as well. For instance, up to a 1 GB database will cost $9.99 and up to 10 GBs will run $99.99. There are also bandwidth charges identical to Azure core computing’s bandwidth charges. The database services are provided by another component called SQL Azure — previously named SQL Server Data Services.

Additionally, developers who want to use Microsoft’s .NET Services, will pay additional fees: $0.15 per 100,000 message operations, including service bus messages and access control tokens, the company said. That service is also subject to the same bandwidth charges.

As for service-level agreements, Microsoft promised compute connectivity at 99.95 percent, and a 99.9 percent guarantee for storage.

Ballmer’s partner pitch

Meanwhile, Ballmer insisted that Microsoft will continue to be successful with the help of its partners. “We will be tenacious, tenacious, tenacious,” Ballmer shouted into the audience in his typical high-energy presentation.

During a Q&A following his speech, Ballmer talked briefly about Microsoft’s contretemps with the European Commission (EC) and why he chose to ship Windows 7 in Europe without Internet Explorer (IE). “In the European Union, we received some decisions that don’t make the regulatory questions seem all that clear,” he said.

“Removing IE from Windows 7 was the thing that was most consistent with the EC,” Ballmer added.

Like other executives at the WPC, Ballmer hammered on the huge wave of applications and tools that are on schedule to ship in the next year, including Windows 7, Office 2010, SharePoint 2010, and others, as the products that he believes will get the economy on a healthy footing — at least in the technology sector.

“I think the opportunities are there, so we don’t have to wait for the rebound,” he said, before shouting, “This is the year we can really get out there and pump up the economy.”

News Around the Web