Amazon reduced the pricing of the Windows servers claiming that it is AWS tradition to explore ways to cut costs and pass the saving to its customers. The new prices will be effective from April 1, 2013 and applies to Amazon’s Standard (m1), High-Memory (m2), Second-Generation Standard (m3), and High-CPU (c1) instance families.

The latest move will bring Amazon Web Services pricing well below that of what Microsoft is charging its Windows Azure customers in the preview mode. Considering that Microsoft is renting out virtualized servers at a reduced rate because of the ‘preview’ tag, Ballmer may have to re-think the post-‘preview’ strategy if he wants Azure customers to stick around.

Accountants over at Microsoft and Google may very well be scratching their heads as to how low the margins of a company can go. Microsoft may have reduced the pricing at which it provides licenses to Amazon and that’s why Bezos’ company is able to provide Windows instances at such a reduced price. It could also be the case that Amazon has somehow managed to extract more performance out of its existing infrastructure that allows it to pass the benefits to its customers. We believe it is more to do with Microsoft reducing the licensing prices.

Just last week Amazon upped its security offering for the cloud by providing its customers the option of renting CloudHSM. Using CloudHSM companies will be able to encrypt entire AWS instances to keep their data secure.