According to the Washington Post, Microsoft Corp. said it will match Amazon.com Inc.’s lowest prices for competing products as it seeks to win business in a growing market.

“Microsoft is rolling out Windows Azure Infrastructure Services, which will let customers run existing applications on servers and storage machines in Microsoft data centers, after more than nine months of testing. The company also committed to match market leader Amazon on prices for computing and storage services, even if Amazon cuts rates, said Steven Martin, general manager of Windows Azure Business Strategy.”

This is another indication that Microsoft is growing frustrated with being a distant second to AWS when it comes to selling cloud services.  This move means that AWS now controls Microsoft pricing, and that Microsoft is okay with loss leaders into the market.

In the emerging IaaS cloud computing space, AWS has become the standard bearer in terms of cloud service offerings, and now what the provider should charge for those services.  While Microsoft sees this as a savvy move, the message to those in the market for IaaS services is that of desperation and not innovation.  Not sure this is a good move on Microsoft’s part.