How do these machines really compare? the 10c/h amazon machine has 1.7g or ram and a really slow processor.

also if you buy a year of service off Amazon its more like 4c an hour.

What does M$’s offering boast?

This comparison has holes.

As an aside giant companies can afford to lose money on new products for years, inorder to strangle out the competition, hard to draw any conclusions really.

Of course I know the ms is garbage beside *nix, but hey that’s beside the point.

Lies, damn lies, and statistics indeed.

Should be: MS is 20% more expensive than AWS OR AWS is ~17% cheaper than MS

Now let us assume that Cost-plus pricing was chosen by Microsoft then what are the costs? They are: hardware, infrastructure (building space, energy, bandwidth), and labour. I don’t think that Amazon has any substantial advantages regarding hardware and infrastructure and furthermore don’t think that Amazon’s staff is that more efficient/productive than Microsoft’s, so the only explanation would be that Microsoft is paying their employees 20% more on average than Amazon. If you depend on wage labour yourself then you should ask yourself what is actually better for you – Microsoft’s salaries or Amazon’s?

At this stage you might start thinking about the economics of open source in general and Linux in particular. Who is paying open source? The users? The general public (via taxes)? Are people working on those projects actually paid? Fairly? Is open source really cheaper (than closed source/Microsoft)? Are closed source companies greedier than open source companies? (look at the earning reports!) Maybe it is “socialising costs – privatising profits”?

Whatever. My guess is that Microsoft is trying to only get early adopters at this stage to not overload their infrastructure. It is hard to predict usage patterns and infrastructure load and they don’t want to risk to much – therefore the somewhat uncompetitive pricing. Real price wars will start later (if at all).