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What facorreia said, and I'll add for simplicity that Azure is to Microsoft what AWS is to Amazon (as opposed to your question of Azure being like EC2).

Plus Google AppEngine (yes, Azure has more than 1 flavour: AWS style, GAE style, and the following that I'm about to mention) and also an environment where you can drop your pre-configured Windows 2008 Server VM as well (not sure if it is limited to Windows 2008 VM only).

I think the main difference, according to what I got from a friend who used it, is that the Azure PaaS offering is billed by uptime while Google's App Engine is billed by actual usage (because it can shut down unused instances).

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