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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 itself will provide companies with a private cloud option, Hauger added. It's still unclear how what exactly its offering will look or whether it will come under a different brand than Windows Azure. Microsoft might offer private clouds as some sort of service that sounds more like a dedicated Internet-based cloud than a premises private cloud.

"You would have a private cloud run for a hospital that would be certified as HIPAA compliant and run by the vendor instead of run by a health care client," Hauger said. "We can get the economies of scale in managing that infrastructure and the system and still provide guarantees around the data."

In response to a question about Microsoft's value proposition versus that of its competitors, Microsoft laid out its view of the cloud computing platform market.

"There are companies at the low end that are essentially providing you with a raw set of resources, and they say, 'Hey, here's a VM, here's a server, good luck, and let us know if you have any problems,' " he said, pointing to Amazon.com and VMware. "Then there are a set of people in the pure-play space -- Google is an example in this one with AppEngine -- and so you build an application and it runs, but you have no control over the resources underneath that."

Microsoft, he argued, straddles both of these worlds. "We give you some guarantees around the level of resources you get, the power of that VM you have, the amount of memory you get, etcetera," he said. "But you also get simplified systems management that then takes you into that pure-play cloud services realm."

In addition, he said, Microsoft's cloud, unlike those of Amazon and Google, is designed to integrate with on-premises applications. Microsoft also has a huge on-premises installed base and partner community to draw on, he added.

That said, Hauger said Microsoft doesn't expect to monopolize cloud computing like it has client-server computing, even if many companies decide to standardize on one cloud, as he expects will eventually happen.

"Our cloud is completely based on standardized Web services, and in that sense I think enterprises will look for clouds that provide those standards and that interoperability," he said. "They don't want vendor lock-in, but they won't move, likely." He added that he expects there to be only a handful of major public cloud vendors a decade from now, rather than hundreds.

The editors of Internet Evolution have published an independent analysis of the changing winds in cloud computing. Download the report here (registration required).