From the customer's point of view, having Microsoft SQL Server Express on Azure could have a number of benefits....
Because it's free, customers that have already jumped aboard the Azure train have one more tool at their disposal for developing and testing apps, as well as for implementing apps that require a lighter database load.
Even those new to Azure could benefit from having a free database for development and testing, depending upon what sort of infrastructure they already support in-house. For example, the Azure and SQL Server Express model could be useful when bringing on temporary developer or QA help during crunch times. You get the environment you need without having to invest in infrastructure that is required for only a short time. Microsoft SQL Server Express makes the whole idea of this just a bit more attractive.
The new SQL Server Express component, in itself, might not seem that big a deal, but it does represent another piece of the Azure puzzle that could be enough to get organizations to try out the Azure model, without heavy investments or long-term contracts. They get an easy-to-implement platform with the database they need and with little effort on their part.
Microsoft SQL Server Express also provides a handy way to build app prototypes and deliver proof-of-concepts without big time investments, and it provides a vehicle for implementing an app in stages, with less up-front commitment and fees. It's even cheaper than Azure SQL Database.
Of course, Microsoft isn't offering SQL Server Express on Azure simply because the company wants to be a good neighbor. Adding the database can make Azure more appealing, perhaps driving customers to Azure who might have been riding the fence.
Although this one aspect alone might not seem like much of an incentive, it could help hook customers on the Azure platform, with SQL Server on the back end. True, the free version is fairly limited, but it's one more way to convince customers to give Azure a try, while offering them something substantial that can grow into larger commitments, leading to more sustaining or higher paying customers.
From all appearances, Microsoft is simply making use of that age-old marketing strategy known as the "loss leader," where a product is made available at a below-market value to get people into the store. Microsoft is trying to get the whole world into the Azure store, and it hopes that SQL Server Express will be the Sunday paper coupon that everyone is clipping out.
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