The cloud wars of 2017 have kicked off, with Microsoft ( MSFT) announcing price cuts to its Azure offering this week.

The Redmond., Wash., software group dropped prices by up to 61% on some of its products, though other offerings will not carry a discount.

Aggressive cuts are "business as usual" in the cloud business, SunTrust analyst Kunal Madhukar wrote Tuesday after Microsoft's latest moves, noting that rivals Amazon (AMZN) and Alphabet (GOOGL)  have also taken part in recent price slashing. 

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Since its founding in 2006, cloud leader Amazon Web Services has reduced prices more than 50 times. The last came in November 2016, before the company's re:Invent conference.

"The pace of price cuts does feel like it's picking up," Deutsche Bank analyst Karl Keirstead wrote, noting that Microsoft has cut prices twice in the last four months alongside the AWS discount last fall.

Amazon Web Services and Microsoft Azure lead the fast-growing cloud computing market, with $14.1 billion and $3 billion, respectively, in yearly sales, annualized from the most recent quarter. By 2022, Evercore projects, AWS is on track to generate more than $56 billion in annual sales.

Alphabet's Google Cloud Platform runs a strong third place in the cloud market. Snap recently signed a $2 billion deal with Google Cloud that stretches over five years, the Snapchat parent said in its recent IPO prospectus

"Google Cloud has a growing number of new customer wins that now include Snap, Spotify, Evernote, Zulily and Niantic [the developer of Pokemon Go]," Pacific Crest analyst Andy Hargreaves wrote in a Wednesday report.


"The large win at Snapchat partially explains why Google Cloud unveiled plans last summer to aggressively expand its data center footprint in 2017; those plans include building 25 new data center zones, or locations, in nine new regions next year."

Google had a price drop in October and SunTrust's Madhukar suggested that Google could time price cuts for its Cloud Next 2017 event, which occurs in March.

 
Improving margins in cloud services have allowed Amazon, Google and Microsoft to lower their prices without wrecking the businesses. But as long as the cloud sees rapid growth, the battle and the price cuts will likely continue.

Alphabet is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells GOOGL? Learn more now.

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