Microsoft has recently unveiled its pricing for Windows Azure. In short, Microsoft did exactly align with the pricing offered by Amazon. CPU costs $0.12 / h, meaning that a single instance running 24/24 for a month costs $86.4 which is fairly expensive compared to classical hosting provider where you can get more for basically half the price.
But well, this situation was expected as Microsoft probably does not want to start a price war with his business partners still selling dedicated Windows Server hosting. Current Azure pricing is sufficiently high to deter most companies except the ones who happen to have peaky needs.
To me, the Azure pricing is fine except in 3 areas:
- Each Azure WebRole costs at least $86.4 / month no matter how few web traffic you have (reminder: with Azure you need a distinct webrole for every distinct webapp). This situation is caused by the architecture of Windows Azure where a VM gets dedicated for every WebRole. If we compare to Google App Engine (GAE), the situation does not looks to good for Azure, indeed, with GAE, hosting a low traffic webapp is virtually free. Free vs. $1000 / year is likely to make a difference for most small / medium businesses, especially if you end-up with a dozen of webapps to cover all your needs.
- Cloud Storage operations are expensive: the storage itself is rather cheap $0.15 / GB / month, but the cost of $0.01 per 10K operations might be a killer for cloud apps intensively relying on small storage operations. Yes, one can argue that this price ain't cheaper with AWS, but this is not entirely true as AWS provides other services such as the block storage that comes with 10x lower price per operation (EBS could be used to lower the pressure on blob storage whenever possible).
- Raw CPU at $0.12 / h is expensive and Azure offers no solution to lower this price whereas AWS offers CPU at $0.015 / h through their MapReduce service.
Obviously, those pricing weaknesses closely reflect missing cloud technologies for Azure (at the moment). The MapReduce issue will be fixed when Microsoft ports DryadLinq to Azure. Block storage and shared low cost web hosting might be also on their way too (although I have little info on that matter). As a side note, the Azure Cache Provider might be a killing tool to reduce the pressure on the cloud storage (but pricing is unknown yet).
As a final note, it's interesting to see that the cloud computing pricing is really dependent on the quality of the software used to run the cloud. Better software typically leads to computing hardware being delivered at much lower costs, almost 10x lower costs in many situations.