Windows Azure: Microsoft's Big Bet

Microsoft, which has spent more than $1 billion to build gigantic data centers to run Azure, faces formidable competition from companies like Google and Amazon that have already become synonymous with delivering services over the Internet. In addition, startups are cropping up left and right to grab their piece of the cloud computing pie. All of which suggests that Microsoft will have to get paying customers onto the Azure platform as quickly as possible to stake its own claim in the cloud.

To make this happen, Microsoft has built Azure to support open source programming languages like PHP, Ruby On Rails, and Python. The idea is to lure developers that haven't traditionally been Microsoft's biggest fans, and it's a bold move from a company that trying to show the industry that it's serious about interoperability.

While this might seem like a tiger making a pledge to become vegetarian, solution providers believe it will help Microsoft get companies onto Azure more quickly.

"There are people who, for religious reasons, don't want to use the Microsoft platform. You will never, ever convince those folks, although they're a relative minority," says Vince Conroy, CTO at FusionStorm, San Francisco based solution provider. "But I do think Microsoft will be able to convince the people in companies that are making choices based on business decisions."

Tim Huckaby, CEO at InterKnowlogy, a Microsoft Gold partner in Carlsbad, Calif., agrees that once Microsoft illuminates the unique advantages that Azure offers developer, the value proposition will become readily apparent. "It's been difficult to get open source developers into the Microsoft fold, but once they see the Microsoft side of the world, they're usually pretty encouraged," he said.

Many companies are intrigued by the potential of cloud computing but wonder how it'll play with their on-premise software investments. For Microsoft, which has been banging the Software Plus Services drum for the past couple of years, the answer lies in weaving elements into Azure that allow customers to straddle cloud and on-premise software environments.

For example, Microsoft is building Azure templates into Visual Studio 2010 so that developers can move code between cloud and non-cloud applications with a minimum of fuss. Project Sydney, currently in beta and slated for launch this year, directly and securely connects applications running on premise with applications that run in the public cloud environment.

Microsoft, aware that virtualization is the first step many companies are taking into cloud computing, has focused on virtual machine support in Azure so that businesses can leverage existing on premise applications in the cloud.

Azure is also Microsoft's chance to show it's capable of beating Google at its own game by being developers' conduit for vast stores of public information that's stored online. Dallas, a technology Microsoft describes as "data-as-a-service," provides a link to these vast data stores and gives them the ability to create mash-ups.

Microsoft has a well thought out game plan for getting developers onto Azure quickly, but not everyone is ready to take advantages of everything Azure offers. Dave Sobel, CEO of Evolve Technologies, a Fairfax, Va.-based Microsoft Gold partner, expects Azure's first customers to be companies that haven't already made big investments in on-premise software. "To companies that have already invested in on premise software development, it might not make sense to move right away," he said.

Of course, if Azure's pricing undercuts that of cloud incumbents, potential customers could be quickly swayed, although Microsoft faces some pretty intense competition here, too. "There are a lot of worthy competitors in cloud computing, and Azure's pricing will have to make sense if companies are going to use it. That's still kind of the elephant in the room," says Huckaby.

It's hard not to look at Azure and not be impressed with the ambitious effort it represents. While it's not a life or death bet for Microsoft, it certainly represents the software giant's awareness -- some might say obsession -- of the industry imprint that Google has made in a very short time.

Microsoft's army of developers is going to flock to the platform, but Azure's value may not be as readily apparent to traditional VARs and integrators. Business Productivity Online Suite, Microsoft's first big foray into the world of commercial cloud based software, has been a source of concern for some channel partners who feel it's a blueprint for nudging them out of their traditional role with customers.

The good news for VARs is that cloud computing at this stage seems to reinforce the need for 'trusted advisor' relationships. "In the cloud computing conversations I've had recently, no one talks about the providers -- instead they're asking me what do to," says Sobel. "I feel good about that dynamic because it means I will be the trusted advisor."

Added Sobel: "Cloud computing is going to make it much more of a partner play than any of the big vendors were thinking, and leaves me in the position I've been in all along."