Microsoft Azure: A Pivotal Cloud Moment in Time

Michael Vizard

Microsoft has invited the thousands of third-party service providers and application developers it has relationships with to a massive Worldwide Partner 2012 Conference next week in Toronto. It will be a pivotal moment for the Microsoft Azure cloud platform given the fact that Microsoft is trying to position Azure as a richer environment for running both Windows and open source applications.

Today, Amazon owns the lion’s share of the cloud computing market and Google is primarily riding a wave of open source enthusiasm for its platform-as-a-service offering for developers. In comparison, Microsoft has been relatively reticent in terms of rallying its most critical Azure asset, the thousands of partners it sells most of its products through.

The reason for this seems to have more to do with business models as much as it does the fact that, despite open source overtures, Azure remains firmly rooted in Windows. The business model issue stems from the fact that as a company that historically sold most of its offerings through OEM partners and resellers, Microsoft doesn’t have that many direct relationships with customers. For the most part, Microsoft has been selling Azure direct to Windows developers. If those developers are creating commercial applications, that’s not much of an issue. But the vast majority of Windows developers create applications for IT organizations that then decide where they want to host those applications. Most of those IT organizations are just as likely to look to their own private cloud or IBM, Dell, Rackspace or any number of other cloud service providers to host those applications as they are Microsoft.

In fact, because Microsoft has traditionally relied on third-party partners to sell its wares on premise, selling cloud services directly to organizations that it doesn’t have much of a relationship with has been a challenge. Microsoft will spend this week trying to rally partners to Azure, but many of those same partners have conflicting relationships. Resellers, for example, have relationships with both Microsoft and Dell, so which cloud service they are going to recommend will depend on first how much money they can make and how wary they are of the vendor’s ultimate aims when it comes to being the face to the customer. Many of those same resellers are also trying to become cloud service providers in their own right.

These issues are limiting Microsoft’s cloud computing momentum at a time when the company is being given a golden opportunity. Many IT organizations are turned off by cloud service providers such as Amazon and Google that are essentially faceless entities that offer no support and don’t stand behind anything that looks like a meaningful service level agreement (SLA). The alternative is to rely on full-service cloud service providers, but that approach can prove to be expensive. Microsoft has an opportunity to utilize its thousands of partners to put a face on the Azure cloud that provides a range of services at price points that are competitive with Amazon and Google.

For example, one of Microsoft’s ISV partners, Opstera, recently launched a dashboard for its AzureOps application management service that makes it easy to manage disparate Azure services via a single application. Opstera plans to extend that service out to other providers, because obviously Microsoft will probably deliver a similar capability one day. But in the meantime, Opstera CEO Paddy Srinivasan is out promoting Azure as the most complete application lifecycle management platform that can be relied on to deliver the highest quality of service at the best price in the cloud.

As a cloud computing platform for building and testing applications, Azure is a success. As an environment for deploying production applications, much of Azure’s potential is unfulfilled. And because of fierce competition, competing partner agendas and a lack of direct influence over infrastructure decisions, it doesn’t look like Microsoft's real cloud computing potential, outside of a few marquee customers that the company has a direct relationship with, is going to be tapped into any time soon.

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