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Facing threat from competitors, Microsoft spells out cloud plans

With stiff competition from cloud competitors like Amazon, Microsoft is offering Azure discounts to customers who enter into enterprise agreements.

Hoping to lure more corporate users to its cloud environment, Microsoft will offer discounts on its Azure cloud services starting November 1 to all those who have signed enterprise agreements.

Microsoft is specifically targeting companies that are interested in building hybrid clouds that tie together on-premises and hosted environments. Company officials, who gave no indication how steep the discounts would be, said there would be no upfront commitments or overuse penalties and would offer more flexibility in terms of annual payments.

"It's not clear to me how much price elasticity is left in this space. We are at a point where those who want to embrace [the cloud already have]. This strikes me as a move to try and stimulate sales as opposed to feedback from customers that are saying, "if you do this then we will buy more,'" said Mark Eisenberg, Boston-based technical consultant specializing in cloud environments.

While some IT shops are encouraged by lower costs for Azure-based web services, some believe Microsoft could raise the price on those services after they have already fully committed to the environment.

"IT people are going to ask, 'Well you give me an attractive price point today, but once I am locked in (to an Enterprise Agreement), are you going to come up with a new, higher price?'" said Mike Drips, a systems administrator with WiPro Inc. in Houston, Texas.

Two of the fundamental reasons for moving to a cloud environment such as Azure, Drips notes, is the opportunity to either reduce IT staff or eliminate servers, not a decision that is often made lightly.

"So if I get rid of some people and servers and make the move to go to the cloud well, what do I do then? If I get unhappy with higher prices it would not be an easy transition off (Azure) to migrate to someone else. There's got to be a healthy dose of fear in IT about that," Drips said.

Azure status updates galore

In another effort to encourage users to adopt its cloud products, Microsoft has a new partnership with Equinix Inc. to provide users with faster connections and more options for adopting private clouds. Customers will be able to connect their internal networks with Azure at Equinix exchange locations where throughput and availability are greater.

Microsoft will also begin offering Windows Azure U.S. Government Cloud, a public cloud dedicated to serving federal, state and local governments. Azure U.S. Government Cloud is distinguished from other Azure offerings in that data is both siloed from other public clouds and is hosted solely in the United States for compliance purposes, company officials said.

Microsoft detailed these enhancements ahead of October 18, the release date for its wave of enterprise and client software. Windows Server 2012 R2, System Center 2012 R2 and new versions of InTune are all generally available on that date.

The company also said it will release a new Remote Desktop Services application for a variety of platforms, including Windows RT, iOS and Android.

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