Why Microsoft's New Cloud Service Doesn't Mean Funeral Bells For Amazon

Please don't set a date for Amazon's funeral. There's a lot of reasons enterprises will like Microsoft's new cloud, but it won't be enough to hurt Amazon, one former Microsoft employee who worked on its cloud told us.

First, the upside: Microsoft's Windows Azure Infrastructure Services has these advantages:

1. Microsoft will match Amazon's absurdly low prices. That's something no other large-scale enterprise cloud vendor is really promising. Even Google didn't. Google promised to be faster than Amazon, so customers would ultimately pay less that way. Google still wound up lowering its prices.

2. A lot of enterprise customers know and love Microsoft's Windows Server product. Windows Server will certainly run faster, better on Microsoft's cloud than Amazon's, our source told us.

3. Enterprises can run Microsoft's products in their own data centers and in Microsoft's cloud and know everything will play nicely together.

4. Microsoft has salespeople and field service help. Enterprises have a relationship with Microsoft and can get a live person to come to their site and help set things up.

"To put it very simply, Azure is more 'Microsofty' and more 'enterprisey," this source told us. But, "None of this means Azure is a better choice for a company. AWS [Amazon Web Services] is ridiculously better in every dimension."

Forrester analyst James Staten agrees. "Compared to the rest of the public IaaS [Infrastructure as a Service] market, it’s more of a 'welcome to the party' announcement [for Microsoft] than a new innovation or differentiator," he wrote on his blog.

Remember that Amazon has a truly insane number of applications, support products, management products already on its cloud. You can literally build a supercomputer on AWS today.

And as we previously reported, Amazon is actually hiring enterprise salespeople like crazy, too. So Microsoft won't always have the advantage there.