Microsoft's Azure enhancements will resonate much louder than another price reduction

Microsoft CEO, Satya Nadella
Microsoft CEO, Satya Nadella

Amazon, Google and Microsoft have fiercely battled one another to be the cloud storage provider of choice for enterprises. The competition has forced the three tech behemoths to dramatically reduce prices, most notably Google's latest 10% reduction, which followed the company's previously announced 68% reduction.

Research firm IDC recently warned that these price cuts could drive smaller vendors out of business. But Microsoft's (and to a lesser extent Google and Amazon's) immediate and impressive responses to customer demand are really the driving force behind the near-monopolization of the enterprise cloud storage arena.

The price reductions could ultimately hurt all three vendors, especially as margins crumble away, but because Microsoft has allowed innovation and not price to dictate its cloud mission, it should ultimately remain among the enterprise cloud leaders when the dust settles.

Azure as it stands

Microsoft is currently the most far-reaching of the three services, with Azure to be made available in 19 regions by the end of the year (six times more than Google and twice Amazon's regions), and more than $4.5 billion invested in data-centers (also six times more than Google and double Amazon's investments).

Azure registers 10,000 new customers each week. The service hosts 1.2 million SQL databases and more than 30 trillion objects (a huge coup for CEO Satya Nadella who has staked the Internet of Things as one of his main focuses at Microsoft).

Microsoft, which has relied more on Azure-related product and function upgrades than it has on price reductions in order to draw in customers (although it has reduced cloud prices more than 50% in the past year and is now offering hourly billing), took this tactic a step further today by introducing several new options for Azure prospects and clients.

G-series, Cloud Platform and Azure Marketplace

Today, Microsoft announced the G-series of virtual machines. The new lineup, which follows the D-series, is powered by Intel Xeon processors. The D-Series provided users with up to 112 GB in memory and 800 GB of local SSD disk. The G-series features 32 CPU cores, 450GB of RAM and 6.5 terabytes of local SSD storage. This quadruples the memory of Google's largest virtual machine and double's Amazon's largest.

Additionally, Microsoft unveiled the Microsoft Cloud Platform System (CPS), a tool that offers a hybrid environment for Azure deployments. Users will be able to leverage Azure services on Dell hardware in exchange for more security thanks to on-premise storage. Microsoft clients will be banking on receiving the protection without having to sacrifice much Azure and Windows Server functionality.

Microsoft also launched the Azure Marketplace. Now companies can browse, search and sell applications, operating systems and servers within the Microsoft ecosystem.

Recent upgrades

Earlier in the year, Microsoft launched ExpressRoute, a service that allows organizations to connect servers directly to Azure through MPLS providers rather than through the public internet. It also launched reserved IP addresses, and the Azure file storage service, which lets you leverage cloud storage on your local network.

Azure isn't without its flaws. It recently experienced an outage that lasted for five hours, which didn't sit well with Azure customers who are used to steady disruptions.

Not to mention it follows in the shadow of Amazon, which practically invented the space and continues to deliver dramatic innovation, especially in terms of content delivery and networking.

Why Microsoft will remain competitive

Within a week of the Azure disruption, Microsoft created an enhanced service-level agreement that promised 99.99% availability, which translates into a maximum annual downtime of just under 53 minutes. It's these kinds of quick adjustments and unprecedented levels of investment that will propel Microsoft ahead of the game in terms of the enterprise cloud.

Although Google and Amazon have made cloud ubiquitous among the consumer market, Microsoft has focused its efforts on listening to developers and IT departments to build out functionality that resonates behind-the-scenes.

Additionally, Nadella has planted his flag in the ground as the CEO who will make Microsoft the owner of the cloud market. When he sent an email to his employees detailing Microsoft's future and its focus on cloud, mobility and the Internet of Things, he was essentially saying his success (or failure) would follow Azure's course in the market.

And, other than a comically poorly-timed boneheaded remark, Nadella has given himself a head-start on the future in terms of how the cloud will process and simplify storage in order to transmit the data created by the Internet of Things.

Today's announcements further this mission and will resonate much louder with enterprises than another 10% price reduction.