Azure on the Horizon

By Nicole Hemsoth

July 13, 2010

The cloud vendor shakedown is now officially in full effect, as was expected following the Microsoft Partner Conference, which was kicked off in Washington, D.C. yesterday. Although there were a few hints about some of Microsoft’s announcements and a slew of other pre-announcement rumors, there can be no questioning that Microsoft is ready to play ball starting with a full-court press from this moment on. Following recent public decisions to dump unprecedented funds into their new mission and ramp up marketing and partnership efforts, it seems that the real strategy is starting to unfold.

The company announced three main pieces of news yesterday, including that a strategic partnership with Dell, who will use the Azure platform appliance, which is a new item that Microsoft announced at the gathering. This appliance will allow Dell (and a select handful of other big name partners) to provide private and public cloud services to its customers. Other ingredients in the partnership include Dell’s agreement to work with Microsoft to develop a Dell-driven Azure platform appliance to serve the needs of some of its enterprise customers to run in their own datacenters.

In a separate but related news item Microsoft released yesterday was the word that they would engage in a similar agreement with HP. Like Dell, HP will work with Microsoft on an Azure platform appliance that will allow enterprise customers to adopt cloud-based appliances and that they will work together to create a package that will make the transition to Windows Azure easier. Customers would then be able to manage the appliance on HP’s Converged Infrastructure either in their own datacenters or in a managed setting from HP.

The third announcement did wonders for Microsoft’s mainstream Azure visibility as they stated eBay would be a partner as they work to better refine their online services. eBay seems in many ways to be the “no-brainer” in this series of announcements since it is a perfect candidate for cloud computing, especially given the natural peaks and valleys in the course of online commerce. The only surprise there was that the company wasn’t already bursting into the cloud using Amazon’s Elastic Compute resource.

While we did see the expected round of new partnerships, many of the announcements that came out of the event were around plans and future goals. It will be interesting to wait and see how these develop and what they mean for not only Azure’s visibility and wider adoption, but for those who are using their services.

If anyone could call the onset of cloud a disruptive technology, it is the folks from Redmond. Microsoft couldn’t possibly sit idly by and watch its tried and true software business come crashing down as droves of customers realize that they can get the same software and more online in a scalable and often pay-per-use fashion. They launched Azure to keep pace, or at least have a hand in the game, and did so without fanfare. Today is actually first time we’re seeing fanfare — and not surprisingly, it’s big.

The company has been audible on the cloud computing front since the launch of its cloud offering less than a year ago, but it wasn’t until this week that news about Azure hit the front pages in a major way. In fact, although it might have been a slow news day for everyone else, it’s fair to say their rainbow of announcements took over the tech news today.

Last week the company laid off a few hundred workers in order to make room for their cloud computing drive forward, although sources say that these layoffs had been planned well before the company’s relatively recent push for the clouds. Nonetheless, the software giant has been anything but mum about its future plans to make itself a player — come hell or high water. The problem is, it really hasn’t been specific or focused on what this thrust is leading up to. The scattered releases and trumped-up technical computing drives have been compelling but not organized. It was, in other words, hard to call Azure a true contender — even though it seemed imminent.

While there has been something of a crescendo as of late with more news than usual leaking out from the Microsoft camp, today’s partner conference kicked it into high gear. There was a string of announcements to usher in the conference, all of which carried household names like Dell, Fujitsu, HP and eBay, making it clear that Microsoft is aiming big as it looks for partners. While it would be a thrill to be a fly on the wall during the financial conversations about these “partnerships” there is, as of now anyway, no information about any of the dollars and cents behind the news.

The two slightly more surprising announcements were from Dell and Fujitsu, both of whom will make solid strategic partners, of course, but in different ways. For instance, Microsoft is working with Dell to deliver cloud-based services for its big name clients whereas its partnership with Fujitsu is much more far-reaching.

The one that we might have seen coming even if it surprised some today, is the partnership with Fujitsu. This bodes particularly well for Microsoft’s desire to maintain a foothold in the Asia and EMEA in general and fits in perfectly with the Japanese company’s goal of expanding its cloud reach. Fujitsu, like Microsoft, has spent considerable ad and marketing dollars making it clear that they plan on being irreplaceable forces in the cloud, but also like Microsoft, the details on how they planned to make it so were sketchy at best. As of yesterday it’s finally clear — partnerships versus being the first, not to mention throwing in a lot of money and new employees to handle the new cloud focus, are the keys to their strategy.

The unofficial word is that Microsoft and Fujitsu have made a preliminary decision to partner for both of their cloud computing goals and will most likely make this announcement official later this week, according to one source. This semi-announcement (it’s not official yet but this is not a surprise) comes directly on the heels of Fujitsu’s president Masami Yamamoto’s statement at the end of last week that the company will be pumping 100 billion yen for this fiscal year into its cloud computing drive — making it the official center of predicted growth of the Japanese firm. In a tip-off about the upcoming news that many predict Yamamoto also said that, “there are two qualifications for companies to be eyed for mergers and acquisitions — one is strong technology and the other is having good customers. In that sense, a software-related firm would be a big target.”

If that wasn’t a clue about who Fujitsu had their eyes on, then I don’t know what is — and it does make perfect sense. This partnership would allow Microsoft to have first stab at Fujitsu’s collection of datacenters and their growing list of customers and Fujitsu would, of course, be set to offer up Azure which, according to the source, would give “Internet-based access to Windows software stored at Fujitsu datacenters.” For its part, Fujitsu is expected to provide cloud platforms at its scattered host of datacenters in markets that have been less cloudy when compared to Microsoft’s home turf, including Australia and Singapore, among others.

Although it’s hard to tell what the rest of the Partner Conference will hold as the week rolls on, this has been something of a coming out party (like in the debutante sense, of course) for Microsoft. Everyone knew that the company wouldn’t be satisfied with just having another cloud offering on par with some of the smaller vendors and it was only a matter of time before they woke up and announced their presence through strategic partnerships — a crucial MO for a company in Microsoft’s position.

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