Microsoft has made a major Azure price policy change by adding a monthly payment option for reserved instances, reversing a previous policy of charging up-front for the service.
It’s a significant change because Microsoft made reserved instances the cheapest way to pay for Azure: buyers were offered big discounts of up to 70 percent on as-you-go pricing if they paid up-front prices for either one or three years of services like SQL server, IaaS, or Windows and Linux VMs.
Users with the Azure hybrid benefit could save even more.
While Microsoft didn’t lock customers into the full term – a pro-rata rebate was offered if customers bailed early – it still insisted on the up-front payment for the full term.
Until last week when in a brief and obscure post the company slipped out news that “Now you have the choice of paying for reservations upfront or on a monthly basis. The monthly payment option is available at no extra cost.”
The new offer isn’t completely straightforward, because Microsoft has warned that “… if you’re in a non-US dollar market, your monthly payment amount may vary depending on the current month’s market exchange rate for your local currency.”
Microsoft’s not explained why it’s made the change, but it is not hard to guess why: at a time when customers are being encouraged to adopt subscriptions and opex spending patterns, three years of up-front fees looks an awful lot like an old-school capex model.
Now Microsoft has the best of both worlds: discounts that come with long commitments and easier-to-bite-off payments for those willing to sign up for the long haul.