Office 365 & Windows Azure Cloud Pricing: How Low Can It Go?
Microsoft has cut Office 365 and Windows Azure pricing, the latest potential sign that some channel partners could get caught in a cloud computing price war long before most IT customers have shifted their systems into the cloud.
The fast facts: Microsoft has cut most Office 365 enterprise pricing plans by 20 percent, while also making changes to its pricing for Office 365 for education. Microsoft has also cut prices for Windows Azure’s cloud storage and compute services. Ironically, the price cuts come as Microsoft Channel Chief Jon Roskill predicts Microsoft will soon be known as the world’s largest cloud software provider.
Big Numbers, Smaller Price Tag?
Talkin’ Cloud still thinks Roskill’s statement could be accurate; after all, scores of cloud services providers pay Microsoft for the right to host and offer Exchange Server, SharePoint, Lync and other cloud applications to end-customers. Moreover, the Office 365 and Windows Azure price cuts could be good news for customers who were seeking added incentive before embracing cloud applications.
Still, some channel partners could get shot in the cross fire between Microsoft’s cloud price cuts, Google Apps’ low annual fees (about $50 per user per year, last I heard) and pricing pressure from Amazon Web Services. Also of note: Hewlett-Packard is expected to launch an HP Cloud within two months, and HP is purposely trying to avoid cloud price wars.
True Believers
Meanwhile, Microsoft has roughly 42,000 channel partners focused on cloud computing. Without offering exact figures, Roskill recently told Talkin’ Cloud that roughly 20 percent of those 42,000 channel partners are driving 80 percent of Microsoft’s channel-oriented cloud sales.
How will those partners react to Office 365 and Windows Azure price cuts? Transaction-focused partners will likely quiver, realizing that cloud pricing is getting squeezed fast. But cloud integrators might be upbeat, continuing to charge lucrative consulting fees to help customers jump from on-premise software to cloud services.
Either way, heads are turning as Microsoft cuts Office 365 and Windows Azure pricing.
