Microsoft is making available a preview of a Azure Functions, a new "serverless compute" service to compete with AWS Lambda.

Microsoft is open sourcing the runtime for Azure Functions, said Microsoft's chief of Cloud and Enterprise, Scott Guthrie, during the Day 2 keynote at Microsoft's Build 2016 developer conference, so that developers can host functions on Azure, in their datacenter or on other clouds.

Azure Functions is well-suited to Internet of Things (IoT) scenarios, as it allows developers handle tasks that respond to events. It also lends itself to use in Web and mobile and big data, too, officials said. The service automatically scales out to meet demand, so that it only charges for the period of time when functions run.

What to expect Microsoft Build 2016 Mary Jo Foley's watch list for Microsoft's Build 2016 developer conference. Read More

Microsoft also announced general availability of its Azure Service Fabric, its next-generation platform-as-a-service technology.

Using Service Fabric, Azure applications can be decomposed into smaller components, a k a microservices, that can be updated and maintained independently of the underlying infrastructure. The Service Fabric enables the various microservices to communicate with one another via programming interfaces.

Microsoft itself has used the Service Fabric technology to run pieces of the Azure core, as well as services including Skype for Business, the Azure SQL Database, in building/deploying Intune, Event Hubs, DocumentDB and Cortana. Customers will get the exact same Azure Service Fabric framework technology that Microsoft uses internally, officials have said.

Microsoft also announced today previews of Service Fabric for Windows Server, for deploying on-premises and other clouds, and Service Fabric for Linux and Java APIs, and said it would open-source the programming frameworks of Service Fabric for Linux later this year.

Microsoft also is making available today for purchase new Azure IoT Starter Kits for building IoT prototypes using Azure IoT services The kits will cost between $50 and $160.

And the company also took the wraps off a new Power BI Embedded service running on Azure. Power BI Embedded enables developers to embed interactive reports and visualizations in any application on any device.