Microsoft Azure Pulling Out of Northwest Due to Taxes

Microsoft Azure, its public cloud-based developer platform, will no longer distribute applications to developers from its northwestern hub, as a "change in local tax laws" compels Microsoft to migrate those applications to other geographies prior to the service's commercial launch in November. Microsoft hopes that it can seize market-share in the cloud-based services space by persuading developers to adopt the platform quickly.

Microsoft's Azure, its public cloud-based developer platform, will soon offer developers one less geographical region from which to run their applications. Azure relies on a worldwide network of distributed data centers to deliver SAAS (software as a service) to users.

"Due to a change in local tax laws, we've decided to migrate Windows Azure applications out of our northwest data center prior to our commercial launch this November," announced an Aug. 4 posting on the official Windows Azure blog. "This means that all applications and storage accounts in the 'USA - Northwest' region will need to move to another region in the next few months, or they will be deleted."
The posting added: "Around the time that the 'USA - Northwest' option is removed, we will also provide an automated tool available on the Windows Azure portal to migrate projects." An e-mail will be sent to CTP participants when the tool becomes available on that as-yet-unannounced date.

In addition to "USA - Northwest," Azure offers "USA - Southwest" and "USA - Anywhere" as geographies from which users can run Azure applications. Microsoft plans on adding further geographies at an undetermined time in the future.

Microsoft announced at its Worldwide Partner Conference in July that Azure would be available for free until this year's Professional Developers Conference in November. After that point, customers will have three different options for paying for the service: a pay-as-you-go model, a subscription format or via volume licensing.

For all three types of service, users will pay 10 cents per gigabyte for incoming data, and 15 cents for outgoing data. The "consumption" model will cost 12 cents per hour for infrastructure usage, and another 15 cents per gigabyte for storage. The business edition of the SQL Azure database will cost $99.99.

Microsoft's initial price cuts are designed to build market momentum for the platform, which will face competition from similar cloud-based offerings by and Google. Doug Hauger, general manager of Microsoft Azure, told an audience at the Worldwide Partner Conference that Microsoft would offer discounts for partners, as well as allow partners to charge customers for applications and services built using the platform.

Azure will allow developers to "deliver solutions very, very quickly," Hauger added at the time.

Azure and other cloud-based services still face structural issues, such as unexpected downtime, but analysts also feel that their presence could ease many IT professionals' reservations about running parts of their operations in a public cloud.

Microsoft has no plans to make Azure available to run in an enterprise's private cloud. Even so, some of Azure's functionality, including the ability to boot from a VHD (virtual hard disk) has been integrated into Windows Server 2008.