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Leading up to a press conference on Thursday, Microsoft announced a few updates to their cloud service Azure this morning.

Tomorrow Microsoft is hosting an event in San Francisco titled “Meet Windows Azure.” To lead into the announcements coming during that conference, the company has just announced some impressive features coming to the cloud service Azure, such as solid state drives (SSDs) and an overhauled REST API.

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Many believe that Microsoft is working hard to promote Azure with new features and highlight it all at the San Francisco event before Oracle announces its own cloud computing product. Microsoft declined to comment on that speculation. The event will start at 1pm PDT and will be streamed live, online.

First and foremost, the REST API that makes all things Azure tick has been completely rewritten. An unidentified source to GigaOM said that “Prior to this release, the Azure APIs were inconsistent. There was no standard way for developers to integrate their stuff in. That all changes now.”

The change that people might be looking forward to the most however is the integration of all-SSD block storage behind Azure. This hardware will boost performance and give Azure a leg up over AWS. While AWS does offer solid state drives, the company only provides them for high-end services like DynamoDB. Another feature announced this morning was a console to bring all on-premises and Azure-based applications management on one screen. Rumors leading into Thursday include a persistent Linux VM and more open-source friendly and IaaS service features.

Early last month, a rumor began to circulate that Microsoft was going to release a service to integrate Linux with Windows on Azure. Some journalists put together the pieces to interpret the news as a persistent virtual machine running Linux, available in Azure. Also, Microsoft SQL Server or SharePoint Server would be able to run on these platforms as well.

The very last rumor that has been running through the mill in preparation for the event is that Microsoft will present a product called Antares. The service is project to be open source and will allow users to host applications and website on Azure.

Additionally, many are looking to Azure to directly threaten Amazon Web Services (AWS) reign in cloud computing. However, the two can’t be directly compared. AWS operates as an infrastructure-as-a-service (IaaS) product whereas Azure is a platform-as-a-service (PaaS) product.

The Thursday event for Microsoft will be headed up by vice president Scott Guthrie. The speculation has been partly right in that the company wants to become a serious competitor to AWS. However, we can’t forget the other big name competitors in this cloud war as well. Hewlett-Packard has also been making moves to compete for a chunk of the market that Amazon has. HP is taking a different approach however, and continues to work in tandem to a small degree with Amazon EC2 services. Analysts are predicting that Microsoft won’t make any kind inter-operability like that with Azure.

Azure was launched in February 2010 but Microsoft had been working and investing billions of dollars long before then. Unfortunately for the company, Amazon came out with a quicker solution in its AWS product before Azure got a chance to shine. Currently, AWS is far and away the largest public cloud.

While Amazon has the undisputed largest cloud space, looking down the road, some think that the next big providers in the cloud might not be who we would think. For example, Rackspace’s cloud revenue increased $189 million USD in 2011, which is $100 million USD more than 2010. Also, IBM has released its SmartCloud and is working hard to make up space between its revenue base and that of the big dogs like Rackspace and Amazon. Without a doubt, the cloud wars will continue to be interesting in the coming years.

To read more about the cloud, take a look at our blog post about Citrix offering a new product to virtualize desktops in workplaces.