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6 and 12 Month Pricing for Azure

Microsoft Azure Logo

Buying Microsoft Azure directly from Microsoft is as easy as online grocery shopping and for some people might even be cheaper (Waitrose does have a tempting cheese selection). Until recently, the pricing calculator on www.azure.com offered pay-as-you-go rates or discounted monetary commitment rates if you paid £300 or more per month for 6 or 12 months. You can read our previous blog post about this.

From July 26th, those commitment options are no longer shown, despite the website mentioning them.  No notice, no announcement; one could even use the phrase ‘swept under the carpet’.  Why is this?

As of 1st August, any Microsoft reseller can sell Azure monetary commitment to any customer in the same way they sell other Microsoft software such as Windows or Office (previously, Azure could only be purchased directly from Microsoft or through an Enterprise Volume Licensing Agreement).  Customers can now turn to their IT provider and buy Azure credit in $100 chunks (approx. £65 of Azure services).  This credit will then last for 12 months from the time the customer redeems the code online.  So if you want £1,800 of Azure credit, you would buy 27 or 28 of the Azure monetary commitment chunks.  We’ll run a blog post in the next week or so showing the experience in more detail.

As an example of how this credit might be used, a customer buying £1,800 worth of Azure monetary commitment from a reseller would go on to pay £34.75 per month for a 200GB Azure Backup Vault.  Around 52 months’ worth of Azure Backup (the azure credit only lasts 12 months so they’d spend the rest on other services but work with us here, this is a simple example).

A customer buying direct through Azure.com and pre-paying £300 for 6 months (a total of £1,800) would gain a discount of 22.5% off the pay as you go price and bring the Azure Backup Vault cost down to around £26.93 per month.  Around 67 months’ worth of Azure backup.  Both methods cost the customer the same £1,800 up front so which would you go for?  This is obviously detrimental to Microsoft resellers who wish to transact Azure as they wouldn’t be able to compete against those discounts.

So that is my understanding why the 6 month, 12 month and pre-payment pricing options on Azure.com  were hidden in the little attic room.  I believe it’s only for the time being and Microsoft is working towards rationalising the pricing waterfall and discounts across buying direct and via a reseller.