Microsoft brought some form to its cloud this morning, giving pricing details for Azure, its cloud computing platform.

The service is now in technical preview phase, but will go live at the Professional Developers Conference in the fall of this year, Microsoft said this morning.

With cloud computing, Microsoft hopes to persuade business customers to shift from hosting and running software on their own servers to hiring Microsoft to host and run the software for them. Here is a story we just ran explaining how the Ethiopian school system is using the cloud.

The pricing plan offers several options. Businesses could choose to pay based on usage, as with a utility; on a monthly basis, like a magazine subscription; or on an annual basis, like a car registration.

Here's asn example of what the first option, metered usage of Windows Azure, would cost:

Computing: 12 cents per hour

Storage: 15 cents per gigabyte
Storage transaction: 10 cents per 10,000KBandwidth: 10 cents in/15 cents out per gigabyte

Figuring out how much that would cost will require sitting down with Microsoft or a Microsoft partner (at the Worldwide Partners Conference happening today in New Orleans) and calculating the total cost of running an application, he said.

It's a lot less straightforward than at least one cloud competitor, SalesForce.com, which is offering cloud computing for $20 per user per month.

Here are more details on Microsoft's cloud pricing, if you really want to know:

SQL Azure Web edition database, with 1 gigabyte relational database: $9.99

Business edition database, with 10 gigabyte relational database: $99.99
Bandwidth: 10 cents in/15 cents out per gigabyte

.NET Services
Messages: 15 cents per 100K message operations
Bandwidth: 10 cents in/15 cents out per gigabyte

Service Level Agreements
Compute connectivity: 99.95 percent guarantee
Storage: 99.9 percent guarantee
Automated service management

Salesforce.com was in Seattle on Thursday promoting its cloud-computing product ahead of Microsoft's anticipated announcements this summer about its competing product Azure. Chief Executive Mark Benioff gave a speech at the Grand Hyatt in downtown Seattle to customers in an event called CloudForce, which is touring the globe.

While better known for its Web-based software that helps sales teams track and close deals, Salesforce.com is moving aggressively into cloud computing and creating a platform where software developers can make applications and deploy them from servers that SalesForce.com runs, rather than on the PC or a company's server. It has beaten Microsoft to the market and is already selling developers on the cloud product.

For instance, Starbucks approached SalesForce.com shortly after Christmas with an idea: Create an online campaign and Web site called Pledge 5 to encourage community service, launching the same day as the presidential inauguration. Also, Starbucks CEO Howard Schultz was scheduled to be on Oprah to promote it, so the site had to be built tough enough to withstand hundreds of thousands of visitors. Systems integrator Apperio built the application, which allows users to seek out volunteer opportunities in their neighborhood, in three weeks.

In another example, a small Bay Area company that manufactures kitchen countertops from recycled glass, Vetrazzo, talked about how they managed their supply chain, each countertop slab and travel expenses with custom programs that one developer built on Salesforce.com's cloud platform.

Amazon.com is also a player in cloud computing. Microsoft is expected to make announcements about how it will charge people to use Azure, its cloud product, this summer.

(Photo of Marc Benioff: SalesForce.com)

For a few years now, Microsoft's mantra has been "software plus services," the idea that customers can chose how they buy and consume the company's products. For example, a business may choose whether to buy Exchange for e-mail and run it on its own servers or have Microsoft host Exchange in its data centers and provide it as a service for a per user, per month subscription. For many products, there are also third-party partner companies that offer similar hosting models for Microsoft's business applications. Last week, I talked with three Microsoft executives about which among these options looks the best to Microsoft from a financial perspective, and how the online businesses are evolving.

With Microsoft's Redmond campus largely emptied out for the winter holidays, CEO Steve Ballmer crunched the numbers on the proper level of spending for his company against the current economic climate, which he has repeatedly referred to as a "reset" rather than just a recession. Ballmer said his own estimates for the weakness and duration of the downturn tend to be more severe than those of other business leaders he meets.

With that in mind, he settled on $27.5 billion of operating expenses -- a level the company aims to hold relatively steady through the current fiscal year, which ends June 30, and during its 2010 fiscal year. Ballmer made clear to financial analysts meeting in New York this morning for the company's annual strategic update that cutting back even more significantly -- say to $20 billion -- would be "imprudent."

"I think this is right," Ballmer said.

That should give some comfort to those wondering if the modest layoffs Microsoft announced last month were the beginning of a more significant reduction. Wall Street analysts and investors are pressuring companies in every industry to continue cutting costs as sales and profits slow dramatically.

The strategic update call just came to an end. Ballmer gave a detailed look at seven major business areas for the company. Check back here later this morning for more details.

Update, 7:50 a.m.: As he told Congressional Democrats earlier this month, Ballmer said Microsoft's corporate strategists have been evaluating past downturns -- particularly those driven by "deleveraging." The team read company annual reports from 1927 to 1938 to determine who did a good job managing through the Great Depression. "RCA, God rest them in peace, became our role model," Ballmer said. The company was able to dominate the television business because it continued to invest during bad times, he said.

Then he broke down how Microsoft plans to invest.

InternetNews has a thorough report today pointing to several signs that Google and Microsoft are slowing construction on their expensive data centers to save costs against the backdrop of recession.

David Treadwell, Microsoft's corporate vice president in charge of Live Platform Services, is hosting a meeting this morning with the financial community to discuss the company's recently unveiled Windows Azure platform. A link to the meeting, which will include a strategic overview of the new services platform, can be found here. For background, check out these recent stories on Azure. For more on the financial impact in particular, here's an interview I did with Bob Muglia, Microsoft senior vice president of the Server and Tools business, at the company's Professional Developers Conference.

LOS ANGELES -- Bob Muglia, senior vice president of Microsoft's server and tools business, shared his expectations of the impact Microsoft's new services platform will have on company profit margins, where he sees opportunities for collaboration with Amazon.com -- the company's biggest cloud competitor not named Google -- and more in an interview earlier today.

Check out these edited excerpts of our conversation. I've put the particularly interesting bits in bold for easier scanning.

LOS ANGELES -- Microsoft exec David Thompson, giving a demo of Microsoft Online, noted that the project heads-up screen he was showing is in "Microsoft's new favorite color: Azure blue."

So what of the name Azure, as in Windows Azure, Microsoft's new cloud computing platform? It seems to have caught the Microsoft chattering classes a bit by surprise. (It was not one of the code names I had heard recently.)

LOS ANGELES -- Ray Ozzie, the man who replaced Bill Gates as chief software architect at Microsoft, is on stage at one of Microsoft's most important conferences in years. This Professional Developers Conference marks a "turning point" for Microsoft, Ozzie said.

It's the first time the company is able to talk "end to end" about the software plus services platform it has been working on since Ozzie took over three years ago.

Today, the focus is on the back end systems that run everything from enterprises to Web sites to global Internet services.

Ozzie said a team at Microsoft has been working for a few years on a platform for computing in the cloud. The company unveiled a major product of those efforts: "Windows Azure."

Note: I've posted several updates after the jump.