At its Professional Developers Conference this week, Microsoft made the long-awaited debut of its Infrastructure as a Service (IaaS) solution, under the guise of the “VM-role” putting the service in direct competition with Amazon Web Services’ Elastic Compute Cloud (EC2) and other IaaS competitors. But before you paint its offering as a "me too," (and yes, there is plenty of fast-follower behavior in today’s announcements), this move is a differentiator for Microsoft as much of its platform as a service (PaaS) value carries down to this new role, resulting in more of a blended offering that may be a better fit with many modern applications.
This week Amazon Web Services announced a new pricing tier for its Elastic Compute Cloud (EC2) service and in doing so has differentiated its offering even further. At first blush the free tier sounds like a free trial, which isn't anything new in cloud computing. True, the free tier is time-limited, but you get 12 months, and capacity limited, along multiple dimensions. But it's also a new pricing band. And for three of its services, SimpleDB, Simple Queueing Service (SQS), and Simple Notification Service (SNS) the free tier is indefinite. Look for Amazon to lift the 12 month limit on this service next October, because the free tier will drive revenues for AWS long term. Here's why:
A few weeks back I posted a story about how one of our clients has been turning cloud economics to their advantage by flipping the concept of capacity planning on its head. Their strategy was to concentrate not on how much capacity they would need when their application got hot, but on how they could reduce its capacity footprint when it wasn't. As small as they could get it, they couldn't shrink it to the point where they incurred no cost at all; they were left with at least a storage and a caching bill. Now with the free tier, they can achieve a no-cost footprint.