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As Microsoft Azure matures, pricing remains a problem

Even Microsoft proponents are blasting Azure's pricing model as too expensive and opaque. They're also wondering about the tech underpinnings: What's the virtualization foundation?

Microsoft's fledgling Azure Platform as a Service (PaaS) got a minor face lift this week, but it still doesn't offer enough reality-based resources for many hoping to deploy cloud-based applications. And big questions persist around the complicated Azure price model.

In a perfect world...Azure would have a generic, simplistic pricing model across its product suite. We don't live in a perfect world.

Tim Huckaby, founder of Interknowlogy

At TechEd 2010 in New Orleans, Microsoft honcho Bob Muglia said that the SQL Azure online database will now support databases as large as 50 GB, up from 10 GB. The Web Edition database upper limit rises to 5 GB from 1 GB. Azure's AppFabric, the online service bus component, and the Azure Content Distribution Network (CDN) are now in production.

The Azure SDK also got a few buffs, like enhanced support for .NET 4 and Visual Studio 2010. The company also added Microsoft SQL Server Web Manager, a tool to help develop, deploy and manage cloud-based apps and "spatial data support" for SQL Azure. Microsoft SQL Server has had support for image files (spatial data) since 2008.

Questions swirl around Azure
Everyone acknowledges that Azure, which became commercially available in February, is a work in progress. But the questions are huge both around pricing and its fundamental underpinnings.

For example, Microsoft has still not definitively said exactly what the virtualization technology Azure is based on. David Greschler, Microsoft's director of integrated virtualization recently told that Azure virtualization will be "Hyper-V related, maybe not Hyper-V based."

Even close Microsoft partners remain puzzled by this, but the consensus opinion is that whatever virtualization is incorporated will have more baked-in automatic self-management and provisioning features than what comes with the on-premise Hyper-V that ships with Windows Server 2008.

"Hyper-V as a pure play doesn't have all the automation stuff needed for cloud computing. Even if you lay Microsoft System Center atop it, it's not fully dynamically deployable, so my expectation is that Microsoft is taking all that stuff and modifying it," said Dave Sobel, president of Evolve Technologies, a Fairfax, Va.-based Microsoft partner.

The SQL Azure upgrade took some knocks as well. TechEd attendee Alan Silverman, a practice leader with Warwick, R.I.-based IT services firm Atrion Networking Corp., said the 50 GB limit in Azure SQL services still falls short.

"We have issues with database processing power internally and were thinking about using Azure for additional computer power, but our databases are around 150 GB today and we expect them to be growing consistently," he said.

Still, many IT pros say Microsoft needs to keep pushing its PaaS game to counter threats from Google and others.

"The cloud economics are compelling, as is the availability of top technical talent to manage the infrastructure," said the CTO of a large Midwestern financial services company. "We have done some testing with Amazon Web Services, Azure and a couple of smaller providers. While it's still too raw for prime time, it's likely to happen down the road -- at least for some workloads."

His company already uses apps with hybrid SharePoint integration, but that functionality will probably move to Azure next year if tests go well.

Impenetrable Azure pricing
And then there's Azure's pricing, which many say is arcane to the point of opacity.

An executive with an East Coast company that builds e-commerce websites has used what's available from Azure but sticks mostly with Amazon's EC2 services.

Microsoft Azure works out to be significantly pricier for similar loads compared to EC2, he noted. He characterized Azure pricing as by the thread vs. per virtualized instance in the Amazon world. "Azure is way more expensive and less flexible."

For Azure, Microsoft "assumes that the whole world is based on .NET 4.0 code…if you have an old DLL, you can't run it. Everything has to be managed code." he said. Unfortunately for Microsoft, he added, the real world is not like that.

His company, as a result, puts most of its Windows-based cloud development work on Amazon's platform. "Windows or otherwise, AWS basically gives you super-virtualization on steroids -- of course there is then the 'vig' for the Windows license."

AWS pays a license fee for each Windows server launched to Microsoft and passes that cost on to consumers. Users are charged for storage, bandwidth and transactions, and each server they spin up. Users can also pre-buy compute hours and pay for special add-ons.

From a technical perspective, Azure is beautiful.

Tim Huckaby, founder of Interknowlogy

Azure, on the other hand, charges for storage, storage transactions, bandwidth, CDN traffic, compute hours per single server instance; that's one application server --not a running operating system that can run many applications, like an AWS machine image (AMI). It charges per GB for SQL Azure, and per transaction for AppFabric, the service bus.

On top of that, users can chose from five subscription packages (one of which is "free") that affect every one of these charges in different ways, a familiar headache to partners and Microsoft licensees, sometimes referred to as the "Microsoft licensing hairball."

"The complexity in pricing and the inability to measure it effectively against the costs of its competition is going to confuse folks…[it] already has," said Tim Huckaby, founder of Interknowlogy, a long-time Microsoft partner in Carlsbad, Calif., via email. Huckaby is heavily into Azure, working with both AppFabric and SQL Azure.

He acknowledges that pricing and licensing is hard stuff, but thinks Redmond could do more to help users and partners get jump-started in the cloud, especially as it makes an early push for Azure.

"In a perfect world, for a partner like us who is betting a big part of our business on cloud computing, Azure would be half the cost of its competition and have a generic, simplistic pricing model across its product suite. We don't live in a perfect world."

Silver lining -- Azure is pretty awesome
Huckaby has nothing but praise for the platform itself, however.

"From a technical perspective, Azure is beautiful. It scales and it's lightning -- just what you'd expect from a billion dollar capital investment."

He also lauded the work Microsoft had put into tooling. "You can build cloud apps … effectively, easily and painlessly. And you can even do it virtually without needing a network dependency….Truly brilliant engineering." he said.

Bridget Botelho contributed to this report. Let us know what you think about the story; email Barbara Darrow, Senior News Director at, or follow us on Twitter.

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