Microsoft Launching Cloud Infrastructure Service

Microsoft and Amazon.com have been competing over providing cloud services.

Amazon was the early leader and still maintains a sizable lead in this business of providing data storage space and computing power to other companies. The data storage and computing typically take place in a remote data center, accessible to the end user via the Internet.

Microsoft, though, started seriously competing in 2010 with the launch of Windows Azure, the company’s cloud platform for hosting online applications and services.

And on Tuesday, in a move that puts Microsoft even more directly in competition with Amazon Web Services, the software company is officially launching Windows Azure Infrastructure Services.

The service, which has been out in preview form since June 2012, allows customers to deploy a broader set of applications than previously and gives them more control over their configuration.

Further signaling its intent to battle Amazon head-on, Microsoft said it would match Amazon’s prices for services such as computing, storage and bandwidth.

The new services fall into what’s generally known as “infrastructure as a service.” That’s where the cloud service simulates a hosted environment in a data center that mirrors a similar environment that might exist at a customer’s offices, said Rob Sanfilippo, an analyst with independent research firm Directions on Microsoft.

Before the preview, Windows Azure had offered only “platform as a service,” in which the cloud service provides the operating system, network and storage for the customer’s applications.

In general, Sanfilippo said, it’s easier for customers migrating from on-premises to the cloud to use infrastructure as a service than platform as a service.

But customers will be able to choose just one or elements of both the infrastructure and platform services, as well as hybrid scenarios, said Steven Martin, general manager of Windows Azure.

Windows Azure currently has more than 200,000 customers and is adding about a thousand more a day, said Martin, who added that customers for its new infrastructure service offering include Toyota, Digital Strikes and Trek Bicycles.

Microsoft does not break out revenue figures for Azure, which is part of the company’s Server and Tools business.

Analyst James Staten, with Forrester Research, believes Microsoft is making about half the revenue of Amazon Web Services, which Forrester estimates tallied about $1.5?billion in sales last year.

Forrester estimates Amazon Web Services has about three times the number of customers of Windows Azure.

Microsoft needed Windows Azure Infrastructure Services to remain competitive.

“The market has been speaking too loudly that they need infrastructure as a service,” said Staten, who was pre-briefed by Microsoft on the news.

Offering the service marks a shift for Microsoft, which had previously not regarded it as a core foundation for a cloud platform.

“We found early on that customers wanted a bit more freedom,” Staten said. “That’s why there was more attraction to Amazon.”

Microsoft’s move signals that businesses can now regard Azure as an extension of their internal platform, Staten said, allowing customers to manage their workloads on Azure similar to how they would work on virtual machines running on Windows Server.

The news also signals Microsoft’s trust in the maturity of Hyper-V, its hypervisor technology that allows customers to host multiple operating systems on a single system, Staten said.