Microsoft Stakes Its Claim As Top Dog In Enterprise Cloud Market

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Microsoft didn't have first mover advantage in the cloud, nor is it the most innovative player out there. But when it comes to selling cloud to enterprises, Microsoft believes it has an unassailable position.

At a press conference Monday in downtown San Francisco, Satya Nadella, head of Microsoft's $19 billion Server and Tools unit, talked up a coming wave of new and updated products and services, some of which are designed to let enterprises mix and match private and public cloud infrastructure.

By blurring the lines between the two, Microsoft says customers can work more efficiently. As it turns out, mixing private and public cloud also highlights the depth of portfolio that Microsoft sees as a key advantage over Amazon, VMware and other cloud rivals.


[Related: Microsoft Clears FedRAMP Hurdle, Sets Sights On Big Government Cloud Deals]

On the private cloud side, Microsoft plans to start selling Windows Server 2012 R2 and System Center 2012 R2 on Oct. 18. Microsoft's Windows Azure Pack, a free add-on that brings public cloud elements like self-service and multitenancy to Windows Server private clouds, is also included.

Microsoft is also partnering with Equinix, a Redwood City, Calif.-based service provider, to let enterprises have peering arrangements between their data centers and the Windows Azure public cloud. This means enterprises can mix and match private and public cloud infrastructure as they see fit, Nadella said at the event.

For example, a company could stand up a Windows Server private cloud and use Azure for backup and disaster recovery, said Nadella.

Windows Azure is becoming increasingly connected to other Microsoft products. Xbox Live, Halo, Office 365 are powered by Azure services like Active Directory, and Microsoft's Halo team is developing on the Azure cloud and using it for in-game analytics, Nadella said.

However, some enterprises haven't yet worked with Azure, so Microsoft is dangling a licensing carrot. On Nov. 1, Microsoft will debut a new Enterprise Agreement that lets customers get discounted Azure prices with no upfront commitment or overage penalties.

Previously, EA customers had to commit to buying $25,000 in Azure capacity up front on an annual basis, and if they didn't use it all before the year was up, they were out of luck.

"With the new agreement, the customer gets to pay only for what they spend, and they get their enterprise agreement discount," Matt Scherocman, president of Interlink Cloud Advisors, a Cincinnati-based Microsoft partner, told CRN. "This will make it much easier for a client to get started in Azure and start to see the value and how it could impact their business."

Microsoft is going hard after government cloud customers, and Windows Azure last week received preliminary approval from the Federal Risk and Authorization Management Program (FedRAMP).

With Windows Azure U.S. Government Cloud, a new version of Azure aimed at federal government customers, Microsoft is trying to keep the momentum going. "It's a separate instance of Azure that is isolated logically and physically," Nadella said.

NEXT: Microsoft's Big Data, Mobile Device Management Plans

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