Microsoft is aiming to build its Windows Azure platform into the public cloud service of choice for enterprise customers with the official introduction of its infrastructure-as-a-service (IaaS) capabilities, enabling firms to seamlessly extend their corporate network into Microsoft’s cloud.

First announced last year, Windows Azure Infrastructure-as-a-Service enables customers to operate virtual infrastructure on Azure, moving workloads between Microsoft’s cloud and their own datacentre as necessary.

However, a key point for enterprises is that Microsoft enables customers to link the virtual infrastructure with their on-premise network, enabling virtual servers and their workloads to appear as if they were part of a customer’s corporate domain and be controlled using the same management tools.

This move brings Microsoft’s Azure into direct competition with Amazon Web Services (AWS), currently the largest provider of public cloud services globally.

As if to drive this point home, Microsoft announced it intends to match AWS on price for services like compute, storage and bandwidth. Amazon aggressively cut its cloud subscription prices earlier this month, following on from similar cuts last year.

A vital feature of today’s update is the Windows Azure Management Portal, a browser-based console that an administrator is expected to use as the primary point of control for creating an organisation’s virtual infrastructure.

David Aiken, Azure technical product manager at Microsoft, demonstrated how the portal can be used by a customer to create a virtual network on Azure, then populate this with virtual servers and link it all via a virtual private network (VPN) to a customer’s own premises.

“This is no different to doing things on premise. Can I install and run third party software Can I manage it with System Center The answer is yes – Windows Azure makes it easy to create virtual machines and provision resources, but once you’ve got them, it’s just Windows,” said Aiken.