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Microsoft Windows Azure Pricing Expected Soon

Managers suggest the company's cloud computing efforts will be pay as you go, but customers can also prepay if they want discounts.

Microsoft will release pricing information on its Windows Azure soon and will also use Azure to power private cloud computing, a Microsoft executive told investors at a conference Wednesday.

Doug Hauger, general manager of marketing and business strategy for Microsoft's cloud infrastructure services group, said Microsoft will announce pricing "soon," but added Windows Azure will cost less than the overall price of running a server internally. Azure will be pay as you go, he said, but customers can also prepay if they want discounts.

As a corollary on pricing guidance, Hauger pointed to the example of Exchange Online, which is priced at $10 per user per month. Licensing the on-premises version of Exchange Server costs users $3 for Exchange Server per user per month, Microsoft says, but with additional costs (including infrastructure, IT staff, licensing and operational costs) Microsoft estimates it adds up to an average of $18 per user per month.

That means Microsoft is confident Azure will be cheaper for customers and will bring Microsoft some benefits as well since it can run cloud apps cheaper than normally because of economies of scale associated with huge data centers, Hauger said.

With prices lower than on-premises software, Hauger said the poor economy will make Azure and other cloud computing platforms more attractive to businesses, despite corporate misgivings about the cloud.

"It's become fairly evident that companies are becoming far more pragmatic about trading off concerns that have never left about privacy and security with economic benefits," he said.

Still, he admitted that that will be true only for a certain subset of applications, including backup , simple .Net-managed applications, disaster recovery, and certain computational functions like photo rendering and drug research. "Your core line of business applications won't be going to the cloud relatively soon unless it's through a private cloud," he said. In order to run on Windows Azure, many of those lines of business apps -- especially older ones -- will have to be rearchitected somewhat, Hauger said.

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