Can Microsoft Extend Its Dominance to the Cloud?

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A view of several IT-PAC server modules being installed at the new Microsoft data center in Quincy, Washington, which will support its cloud computing ambitions.

While some industry watchers say Microsoft has been late in getting its cloud computing game rolling, the company’s strength and capabilities should not be underestimated. Remember the early days of the Internet, when Microsoft seemed to endlessly drag its feet while nimble new players like Netscape rolled out pioneering products? When Microsoft finally flexed its muscles, it quickly turned things around. Will the same thing happen in cloud computing?

Azure vs. AWS
There are some experts that believe that Microsoft will be one of the largest and most influential player in the cloud domain, especially in the long-term. Why? There are several reasons. For one, the Microsoft Azure cloud services platform is both mature and extensive, providing both Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) offerings, while Amazon‘s AWS is primarily a pure IaaS offering (although it did announce its Elastic Beanstalk PaaS-style offering last week).

The main difference is that, as a PaaS, Azure is a higher level platform than AWS, meaning that OS management and the application framework is completely abstracted away from the user. In AWS users get virtual machines that can host Linux or Windows and whichever framework, web server or application of choice. With Azure, users don‘t have to manage the VM‘s themselves in the Azure platform. They only need to worry about the applications themselves.

Microsoft‘s SaaS solutions
However, what will most probably establish Microsoft‘s cloud status in the long run are its desktop applications turned SaaS cloud apps. Microsoft already has taken important steps by offering Office 365 as a SaaS solution that includes Microsoft‘s most popular productivity and collaboration applications like Office Professional, Exchange and SharePoint.

And there is more. Just recently, Microsoft unveiled its Microsoft Dynamics CRM Online as SaaS offering, a clear alternative to the massively popular Saleforce CRM.  In fact, according to several comparison analysis, the Dynamics CRM solution turns out more favorable in terms of important criteria like storage, offline availability, financially backed SLAs and more.

Microsoft‘s cloud strategy
It‘s already clear that Microsoft plans to be “all in” on the cloud, as emphasized in recent comments by CEO Steve Ballmer. At the University of Washington last year, Ballmer stated that Microsoft is  “betting our company on cloud computing.” With such a clear expression of Microsoft‘s strategy, nobody should doubt Microsoft‘s intentions.

Those intentions are backed up by the company’s huge investment in data center infrastructure to support both its consumer and enterprise cloud platforms. Microsoft has built huge data centers in Chicago, San Antonio, Dublin and Quincy, Washington and has announced plans to build additional facilities in Virginia and Iowa.

In addition to investing in new facilities, Microsoft has also pioneered the design of next-generation data center modules to build its facilities faster and cheaper. These container modules will eventually be available to service providers and enterprise customers as cloud-in-a-box “Azure Appliances.”

The Cloud Team
It‘s still unclear whether Microsoft has the necessary cloud talent to outmaneuver and out-execute its rivals. Several Microsoft executives have left the company to join cloud-centric businesses. The ousting of Bob Muglia, the president of the company‘s Server and Tools Business, has also raised questions, especially as the server business (including Azure) had become Microsoft‘s third-largest revenue generator behind only Windows and Office.

Meanwhile, it seems rare for executives of rivals like Google or Salesforce to leave their positions to join Microsoft. Much of Microsoft‘s job advertising is aimed at finding talent for Azure and Office365 so it seems the company is scouring the market for cloud experts.

Whatever happens, it‘s going to be interesting to follow Microsoft‘s cloud strategy and the steps the company will take for its progression.

Olafur Ingthorsson is an IT professional in Reykjavik, Iceland who writes about cloud computing at Cloud Computing Topics.

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6 Comments

  1. While Microsoft may be taking steps towards software as a service, so far it has done nothing to foster the development of desktop as a service. If anything, through control of its Windows licensing policies, Microsoft is doing all it can to avoid creating an environment where cloud-based desktops can thrive. Hardly the actions of a company that is betting its future on cloud computing.

  2. Simon - I'd say their bet is smart. The desktop is almost dead, and they know it. Everything and anything can be delivered via the cloud. In addition, it is more reliable, generally more cost effective, and vastly more intelligent to offer "desktop" applications via SaaS and NOT as desktop applications. Microsoft is seeing the writing on the wall, the desktop is not going to be a good source of recurring revenue for the company. The desktop in 5 years or so as a technology and as a revenue source is effectively dead.

  3. I wouldn't say dominance two years on. Everyone has taken advantage of the cloud and it has saturated the market.