Microsoft turns up the profit dial on Azure by cutting discounts

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Microsoft's Azure platform is growing at a feverish pace with the company saying in their most recent earnings call that the platform had jumped 150% from the year before. But with Microsoft cutting costs for users in other areas, such as Windows, it needs to recover that revenue with other products, like Azure.

Microsoft has recently put the kibosh on a discount plan that was provided to customers who were willing to commit to a monthly spend for 6 or 12 month increments. These plans have been discontinued and Microsoft is not saying much about the plans being dropped other than that they will have more to share in a month or so.

There are many logical reasons why Microsoft is cutting the plans, including the fact that they may not be popular with customers; although, they do seem like an easy way to save some money if you know your expected expenditures for Azure. Microsoft has been lowering prices across the board for its own services that use the cloud to stay competitive with Amazon and Google, so this could be a move to remove one discount from the pool to help keep the service well into the black.

Another thing to consider as well, is that if your product is built in the cloud, it's not a trivial process to jump services. All of the big players know this, so they want you to get locked into their stack, which means that getting a customer in the door is more important than providing long-term discounts. Knowing this, new promotions may be in the pipeline to lower the cost of entry, knowing that they can recover the costs on the backend.

Azure is the future of Microsoft, while other products like Windows and Office will not go away anytime soon, their cloud platform offers the best chance for revenue growth.

Via: GigaOM

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