Free Office365 and CloudFlare are probably the best part of this announcement, since they are "easily migrate-able" by most startups. Migrating from DO/AWS/Linode isn't fun and productive. Even though they are negligible (in terms of money and value) they are the easiest "sticky" points for early stage startups.
That being said - for DevOps people with experience across AWS/DO/Linode and Azure, this would be a good time to start the cold calls and sell your services to YC companies. Paying someone $5-10k on high ($2k/month) AWS bills to free services is a no-brainer.
EDIT: On that note, if any DevOps people want me to do the hustling (aka sales, lead generation) for them, let me know.
EDIT2: Anyone know if the $500k goes for 3-years? If it's only 1-year, then this may not beat the 1-2 years and ~$10k you get from Amazon via their platform: http://aws.amazon.com/activate/portfolio-detail/