Microsoft Azure stops charging data egress fees for some education customers

Microsoft today announced a new perk for some education customers of its Azure public cloud: Starting this month, they won’t have to pay the usual charge for delivering data out of Azure data centers.

“This makes moving to the cloud a much more predictable expense,” Brian Hillger, senior director of business planning for Microsoft’s Cloud and Enterprise business, wrote in a blog post. “Even more importantly, it paves the way for researchers to accelerate the pace of the important work they’re doing.”

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The offer has restrictions. It’s only valid for customers in North America and Europe that have Education Solutions (EES) agreements and are using certain Azure data center regions: US West, US East, US North Central, US South Central, US East 2, US Central, Europe West, and Europe North. Oh, and Microsoft will only cover up to 15 percent of these customers’ monthly Azure bills. And the discount won’t apply to Azure CDN (content distribution network) or ExpressRoute services. Finally, “the waiver excludes customers using egress-as-a-service applications like MOOCs, web hosting and media streaming,” Hillger wrote.

But despite all of that, this type of deal could make a difference for several existing customers and even win some new ones. That’s as important as ever. In the cloud infrastructure business, Microsoft is competing with, among others, Amazon Web Services (AWS), which fetched parent company Amazon more than half of its $1.07 billion operating income for the first quarter of 2016. Microsoft, for its part, has not disclosed financial figures for Azure on its own.

AWS last year began the AWS Educate program through which it gives away credits to educators and students. And both Azure and AWS have given discounts to startups going through certain accelerator programs.

In this new scheme, Microsoft is making it so that qualified customers will no longer have to pay as much as 8.7 cents per GB for egress.

Microsoft has regularly cut its Azure prices to stay competitive with AWS, and those price cuts do impact revenue.

But then again, this change could make a huge difference.

“Our data tells us that egress charges make up a tiny percentage of the overall cost of a cloud service like Microsoft Azure,” Hillger wrote in a footnote to his blog post.