Microsoft’s new cloud price cuts benefit top-tier customers most

Competitive cost-cutting between clouds comes in cycles, and it seems Amazon and Microsoft have ushered in a new phase.

Right after Amazon unveiled a new reserved instance type, Microsoft sliced prices for a slew of virtual machines on Microsoft Azure. Even steeper discounts are available on top of that, but for Enterprise Agreement customers only.

The price reductions focus on what Microsoft describes as its most popular virtual machine type, the Dv2, which uses a 2.4GHz Intel Xeon E5-2673 v3 (Haswell) processor and has “load balancing and auto-scaling built in at no additional charge,” according to the post on the Azure Blog describing the price cuts.

Then there are the Enterprise Agreement discounts. One of the biggest is the Azure Compute Pre-Purchase plan, where Microsoft will discount up to 63 percent off the cost of compute instance when purchasing 12 months of usage ahead of time. Microsoft already offers a 12-month prepayment discount for Azure services, but it’s only 5 percent off for regular customers, and there’s a minimum purchase of $6,000.

Developers, too, are being wooed directly. Members of the Microsoft Developer Network program can receive up to $150 in credit toward an Azure account per month. The high-end discounts are for Visual Studio Enterprise customers; MSDN Platforms customers get $100 in monthly credit, while Visual Studio Professional customers only get $50.

It isn’t a surprise that Azure would save the deepest of discounts for the Microsoft faithful. Microsoft wants to make Azure as appealing a target as possible for existing Windows Server users — especially those still running legacy versions — and to monetize their loyalty.

By contrast, the other big clouds — Amazon and Google, mainly — are platform-agnostic. While they support and provide Microsoft as one of their operating systems, providing migration paths for Windows Server doesn’t constitute a major part of their business plans.