Microsoft says it's 5 times cheaper than chief rival Amazon Web Services in some cases, but AWS says that's 'misleading'
- Microsoft is touting Azure is five times cheaper than Amazon Web Services in certain cases.
- A Microsoft executive said at a conference last month that the company has a "big economic advantage" when it comes to running Windows-based systems in the cloud.
- Microsoft and AWS have been debating this since at least 2018. AWS has said Microsoft's cost comparisons are misleading.
- The debate, and costs in general, are significant as AWS defends it position as the cloud market leader.
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A Microsoft executive recently touted a statistic that the company's Azure platform is five times cheaper than major rival Amazon Web Services when running Windows in the cloud - reigniting a debate between the two companies that's been going on for more than a year.
"A lot of customers start their cloud journey thinking about migration as a way to save costs, drive productivity, maybe even increase agility," Microsoft Corporate Vice President of Cloud Marketing Takeshi Numoto said during a UBS Global conference last month. "We're basically five-times cheaper, for example, versus AWS in a lot of these migration scenarios."
Numoto said the company can provide a "big economic advantage" to cloud customers because of its "rich history" with products like Microsoft Windows Server and SQL Server.
Microsoft created the Windows Server server operating system and SQL Server database management system years ago - Windows Server was introduced in 2003, while SQL server goes all the way back to 1989 - and they've since become the cornerstone to the IT infrastructure at companies large and small. But while they were Microsoft inventions, both products are supported on rival clouds including AWS and Google Cloud Platform.
Microsoft declined to provide more information on Numoto's claims, but the cost comparison to which the exec is referring appears to be from 2018 when Microsoft compared the cost of running Windows Server and SQL Server workloads in a specific scenario and region and said Azure cost five times less than AWS.
AWS declined to comment, but Amazon Web Services Vice President Sandy Carter in an April blog post said Microsoft's cost comparisons are misleading when it comes to running Windows workloads in the cloud. AWS says it runs Windows-based workloads such as Windows Server and SQL Server for companies like Adobe and Salesforce.
Cost and the cloud wars
AWS still dominates the cloud-computing market, regardless of any cost-related claims. Gartner's most recent public-cloud market-share report, released in July, found Amazon's 2018 market share was more than three times the size of Microsoft's - about 47.8% to 15.5%, respectively.
Microsoft is making progress, though, through big deals and partnerships and analyst expect the company will take more cloud market share - perhaps even a "significant amount" - from AWS in 2020.
Timothy Horan, an Oppenheimer & Co. managing director and AWS analyst, recently said he expects AWS to spend aggressively, explore price cuts and a change in market strategy to attract bigger customers and hold on to its position.
"We expect AWS to improve their go-to-market strategy to attract more legacy enterprise customers," Horan told Business Insider. "This is a huge market, and we are only 10% of the way through adoption, so capturing customers the next two years...is critical."
Amazon, meanwhile, has already made changes to offer new discounts and court larger customers.
AWS recently made a "complete overhaul" of its pricing model for its most popular service and offered new discounts to make it more difficult for customers to switch to competitors like Microsoft and revealed a big hiring push for marketing staff and salespeople capable of scoring big enterprise deals.
Corey Quinn, a cloud economist at the Duckbill Group, a company that helps AWS customers manage spending, recently told Business Insider that Amazon has already cut prices more than 70 times and has never increased prices on a generally available service.
"I don't think narrowly targeted price cuts are going to significantly impact the approach a company would take when evaluating a cloud provider," he said at the time.
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