Now that Azure's pricing model is starting to take shape, we're starting to see what Microsoft meant when they said Azure would be priced "competitively". This week, Oakleaf Systems compared Azure to Amazon's cloud offerings, highlighting costs for developers to gets started on these platforms (Amazon Undercuts Windows Azure Table and SQL Azure Costs with Free SimpleDB Quotas).
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I believe Microsoft may be able to get away with pricing at a slight premium to Amazon and GAE, in large part because SQL Azure is an absolute killer feature because of its compatibility with existing SQL Server code. Nevertheless, Azure pricing has to be aggressive, or the value proposition for Azure starts to look weak. I think it's especially important to make the platform available to developers at a free or near-free price point, or Microsoft just won't be able to build the mind-share and experienced developer base it needs to grow, so I'll continue to keep an eye on this space.
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