Microsoft’s announcement of Windows Azure pricing confirmed a lot of speculation about the nature of Azure and its target audiences.

First, Microsoft plans to compete directly with infrastructure-as-a-service (IaaS) vendors, especially market pioneer and leader Amazon Web Services. As CNET’s Ina Fried reported:

On a pure consumption basis, Microsoft said it will charge 12 cents per hour for computing, 15 cents per gigabyte for storage and 10 cents per 10,000 storage transactions. For network bandwidth, the software maker is charging between 10 cents and 15 cents per gigabyte.

Interestingly, The Burton Group noted on their blog that something is missing in Microsoft’s initial pricing for consumption:

As you might expect, the compute model is similar to EC2 in that the pricing is “per hour” and per GB. The missing part in the model is the size (or type in EC2 terms) of the compute platform. I would expect Microsoft to augment pricing for compute based-on the amount of compute resources an application requires.
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