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Cloud price wars resume as Microsoft cuts by up to 51 per cent

Storage and VMs get cheaper, especially for wimpy Windows VMs in Brexit-land

Microsoft has made another round of cuts to its cloudy costs, for both virtual machines and storage.

Microsoft's F-series VMs, which offer cores on a Xeon E5-2673 v3, are down by up to 23 per cent for Linux and 18 per cent for Windows machines.

The A1 Basic VM, Microsoft's second-wimpiest cloud server, is down by up to 42 per cent in a penguin-powered configuration or 51 per cent under Windows.

Figuring out exact costs is hard because the figures Microsoft's provided us pertain to price cuts in particular regions. And Microsoft has lots of those, detailed here on the Azure pricing page.

Suffice to say the 51 per cent figure applies to the UK South region, which is good news given that just last December Microsoft said Brexit-inspired currency fluctuations made a price rise inevitable.

Redmond has also cut storage prices, by up to 26 per cent for Hot Block Blobs and 38 per cent for Cool Block Blobs. Also on the storage front, you can now sample the new “Storage Service Encryption” that applies AES-256 to Azure File Storage.

Microsoft's not saying why it has made these cuts, but the usual reason is that when a cloud flicks the switch on a new data centre, new kit or more mature automation it becomes possible to cut prices. The big three clouds – AWS, Azure and Google – all make a virtue of being able to drive down their costs in this way. To date, none has blinked with a “we're about quality, not price” moment, so none dare to stop cutting prices.

It's also hard to imagine any of the big clouds blinking, because as the Synergy Group assessment of cloud revenue below shows AWS has the lion's share of the market.

Synergy Group cloud revenue analysis

Synergy Group cloud revenue analysis, Q4 2015 and 2016

As Rackspace, VMware, Cisco and HPE discovered when either radically re-shaping or closing their clouds, it's hard enough to catch AWS with a big and decently-featured cloud.

Trying to compete without matching AWS' downward price pressure looks even harder. Unless you are Oracle, which recently changed licences to make using AWS twice as expensive after pledging its own cloud would be faster and cheaper than its Amazonian rival. ®

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