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Microsoft promises Windows Azure savings

Software maker isn't saying how much its Windows-in-the-cloud service will cost, but it says there is room for it to make money and for customers to save versus running things in-house.

Microsoft still isn't quite ready to talk pricing for Windows Azure, but the company says it is increasingly confident there is room for it to make money at the same time customers can cut the cost out of running software on their own servers.

Speaking at a Thomas Weisel investor conference, Microsoft general manager Doug Hauger acknowledged that his case would be more convincing if he could share the hard numbers and promised that those would be coming soon. The talk was streamed on Microsoft's investor relations Web site.

Microsoft general manager Doug Hauger Microsoft

Windows Azure is, essentially, a cloud-based version of Windows that allows developers to write programs that run off of servers that run in Microsoft's data centers.

"People are interested in pricing," Hauger said. "Before they make a decision they want to understand 'is there an economic savings?'... Us saying that (there is) is not necessarily helpful."

Microsoft announced its plans for Windows Azure at its Professional Developers Conference in October and opened the service up for limited testing. The company updated the Azure test code last month.

Hauger reiterated that, in general, Microsoft will price Windows Azure services via a pay-as-you-go model that he promised will be "very, very price competitive" with rivals such as Amazon. Customers will also be able to prepay for Azure usage to get some discounting, he said.

The slowing economy, Hauger said, is actually helping when it comes to pushing large companies. Companies that had been hung up on security and privacy issues are now trying to suss out how those concerns balance out with the economic savings that cloud computing can offer.

"With the current economic situation, it has become fairly evident to me that companies are becoming far more pragmatic," he said. "In the small and medium (business) space, companies are looking about adoption anyways."

Hauger acknowledged that the shift to cloud computing is not just disruptive for Microsoft and its customers, but also for those that have made their living selling Microsoft software.

"There is, I think, concern," Hauger said. "People are used to, in many cases, selling a piece of boxed software and making money right then."

Hauger also noted that there are a limited number of companies that are going to have the software talent and budget to be players in the cloud-computing market.

"I would speculate it's not going to be hundreds (of companies)," Hauger said. "It's going to be two, three, four--something like that."