It seems that Microsoft is finally ready to go all-in with the hybrid cloud, putting not only its fortunes at stake with the concept but those of virtually the entire legacy enterprise vendor community.
The company announced this week that its Azure Stack private cloud architecture is ready for production environments and will begin shipping to partners like Dell EMC, HPE and Lenovo for integration testing in September. At the same time, the Azure Stack Development Kit (ASDK) is available for download immediately to give enterprise users a chance to build and validate applications ahead of time. The system is essentially an on-premises extension of the Azure cloud, says Corporate VP Mike Neil, giving the enterprise the ability to develop apps under a single framework and then deploy on the resource sets that make the most operational and financial sense.
At the same time, the company has issued a new Microsoft 356 bundle that makes it easier for enterprise customers to build business productivity suites. The package comes in two basic forms, an Enterprise edition comprised of Windows 10 Enterprise, Office 365 Enterprise and the Enterprise Mobility + Security suite, and a small business version that pairs Office 365 Business Premium with various security and management tools found in Office apps and Windows 10 devices.
While Microsoft continues to rule the roost when it comes to enterprise software, it has long been the number-two cloud provider behind Amazon in terms of sheer scale. By focusing on hybrid architectures, the company has a good chance of taking the lead in the lucrative business cloud market, which is expected to drive higher margins than cheapest-at-all-costs bulk storage and compute services. To do that, however, it must provide a more compelling, and reliable, data environment than the enterprise can provide on its own, while at the same time overcoming the ingrained enterprise fear of ceding control of infrastructure to someone else.
If it fails to execute, this could produce a serious setback to not only Microsoft and its vendor partners but much of the cloud industry as well. Lacking the scale of top providers like Google and Amazon (and Microsoft itself), companies like Rackspace have carved niches for themselves with specialized services, including hybrid clouds. If the enterprise cannot effectively link their legacy Microsoft applications and middleware to public cloud resources, then many are likely to opt for either all-public architectures using cheap hyperscale infrastructure, or go all-private on commodity white-box hardware.
Regardless of how all this shakes out, expect to see turmoil in the enterprise vendor community as traditional hardware refresh and software licensing models give way to service-based cloud solutions. Microsoft is said to be planning layoffs in the thousands as it shifts its focus to the growing cloud market. According to Tech Crunch, this could involve the merger of its enterprise customer unit with one or more of its small-medium enterprise (SME) divisions. Other published reports claim that an announcement of a major reorganization could come as early as next week.
Clearly, the stakes are high for Microsoft and virtually every other company that has a hand in the enterprise technology space. In all likelihood, the hybrid cloud will emerge one way or another. The only question is whether legacy IT vendors will be able to make the transition intact or be forced to strip down to suit a faster, more dynamic business environment.
Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata and Carpathia. Follow Art on Twitter @acole602.