Microsoft partners ponder Azure pricing complexities

By Barbara Darrow, Senior News Director

NEW ORLEANS — Some VARs want to kick the tires of Microsoft-hosted Azure cloud services, but they need to sort out a bewildering array of price details.

“This is more complicated than trying to figure out the per-packet cost of my mobile wireless service,” said Rand Morimoto, CEO of Convergent Computing, a long-time Microsoft Gold partner, when apprised of the price plan.

Price options include a 12 cents per hour charge for compute power; 15 cents per gigabyte of data stored, 10 cents per 10k storage transaction and 10 cents per gigabyte of data flowing in and 15 cents per gigabyte flowing out. The SQL Azure database will be $9.99 for up to 1 GB or $99.99 for up to 10 GB with similar bandwidth charges.

Microsoft will also offer service-level agreements (SLAs) of 99.95% for compute connectivity and 99.9% for storage. Microsoft Partner Network members will get a 5% discount on Azure services.

Microsoft VARs that use the rival Amazon Web Services (AWS) said it’s a tough call at this point. “Because Azure and AWS are different technical models, it’s hard to do an apples-to-apples [comparison], but the CPU element seems like it will be cheaper,” said one Microsoft Gold partner who uses AWS to build e-commerce sites for customers.

“Of course you have to explicitly program for Azure to use the CPU. The storage seems comparable, and the storage transactions depend.… Amazon’s [are] $0.01 per 10,000 gets and $0.01 per 1,000 puts, so it could be 10X one way or the other depending on the mix of gets and puts,” said the Gold partner via e-mail.

Of course, complexity is often in the eye of the beholder. “This isn’t confusing if you’re already in the hosting business,” said Carl Mazzanti, co-founder of eMazzanti Technologies, a Hoboken, N.J.-based Microsoft Gold VAR with a hosting business.

For some hosting partners, it might make sense to review the Microsoft options after true launch to determine if they should continue hosting themselves or resell Microsoft Azure-based servcies, others at the show said.

Perhaps most important for partners is that they will be able to bill their customers for any partner-developed Azure services and thus “own” that customer relationship. There had been concern that Microsoft would insist on controlling that transaction and relationship. Mazzanti said that is very good for partners that they price and bill out their own Azure services.

Doug Hauger, Windows Azure general manager, told attendees of the Microsoft World Partner Conference 2009 here, “We bill you, and you build the solutions and charge customers whatever you want atop the platform. So you drive the biz model.”

Going into this week’s conference, Microsoft had told large customers it would simplify pricing compared to Amazon Web Services and come in at a discount. Depending on which level of AWS is being compared, it may have done so.

Microsoft announced the pricing Tuesday. The full service comes online in October at the company’s Professional Developers Conference, although anyone can tap into a free community technical preview (CTP) now. Microsoft execs used the WPC to encourage partners to tap into the CTP now to play and get “skilled up.”