Microsoft has formally announced Windows Azure, its on-demand server solution. So what's so great about it?

Imagine you're somebody like Ticketmaster who experiences high demand on server time whenever tickets go on sale for a major artist.

Now, instead of shelling out thousands on (mostly idle) server kit to cope with the demand, you can rent it from Microsoft on a pay-as-you go basis whenever the need arises.

During the Microsoft Worldwide Partner Conference 2009 today, Bob Muglia, Microsoft's President of the Server and Tools announced Windows Azure, the cloud services operating system, a web-based relational database in Microsoft SQL Azure, and connectivity and interoperability with .NET Services.

We were in London last week to see presentations from various organisations on how Azure can be used to take excess server load from their applications, some of whom demonstrated apps already running on the platform, as well as a couple that potentially could.

There was an RNLI Lifeboat app that has already saved several lives plus a new approach to customer service from Easyjet.

The airline is looking at how it can circumvent slow airport desk-based systems and send its operatives wireless for faster passenger processing and taking extra payments.

So Azure will mean that when companies need extra server space they can simply outsource it and just pay for what they use. Microsoft has announced Azure at its Worldwide Partner Conference today and is set to make the system commercial in November, announcing availability at PDC.

Three data centres will be online from the off, in Dublin, Singapore and the US. The system goes up against Amazon's Web Services and Google's App Engine. Microsoft is hoping that its surpreme set of APIs for Azure - it wants to plug into other companies server management apps, for example - will put it at the front of the queue.

Google's solution is impressive, but its language selection is limited to Python and Django. Azure will support any Microsoft .NET languages.

What it costs

The UK and US will be among the territories with Azure from the off, with international availability in the first half of 2010. Pay as you go options will be available at launch, with a subscription model also available which will save on cost for regular users.

So how much does compute power cost? 0.12 US cents (7 pence) per compute hour, that's what. Storage is 0.15c (9p) per GB per month and there's also a commission fee of 1c per 10 thousand transactions.

For SQL Azure Web Edition, a 1GB database is available for $9.99 (£61) per month, 10GB for $99.99. And .NET Services messages are charged at 0.15c per 100,000.