Windows Azure Appliance Targets Big Service Providers

Windows Azure Appliance Targets Big Service Providers

Microsoft is preparing a Windows Azure Appliance for large service providers and big hardware partners that want to offer customers private clouds. But the appliance is not designed for small MSPs to run within their own data centers. Instead, it sounds like small MSPs will need to partner up with big service providers and large integrators to potentially leverage the Windows Azure Appliance. Here's why.

At the Microsoft Worldwide Partner Conference (WPC10), Microsoft this morning said Dell, Hewlett-Packard, eBay and Fujitsu planned to embrace and/or deploy the Windows Azure Appliance. The idea is rather simple: In addition to Microsoft's own public Windows Azure cloud, Microsoft hopes partners will use the Azure Appliance to build private clouds.

But the Azure Appliance is not -- repeat: NOT -- designed for small VARs and MSPs to deploy on their own. When the Azure Appliance officially debuts late this year or in 2011, each Microsoft partner is expected to deploy roughly 1,000 initial servers. According to Microsoft's Bob Muglia, Microsoft will "maintain the flow of new software down to the appliances. The customers still has control in terms of when to update the software and what applications to run."

Muglia expects small VARs and small MSPs to acquire Windows Azure Appliance services from big service providers. And he stressed that the opportunity for VARs and MSPs involves SaaS and cloud application development on top of Azure Appliances.

Big Questions, Few Answers

Plenty of questions remain. For starters...
  • How much will the Windows Azure Appliance subscription cost end-customers?
  • What types of margins can big service providers and small agent resellers expect?
  • Why would a small MSP and/or VAR partner up with a big service provider to offer Windows Azure Appliances rather than simply plugging customers directly into Microsoft's private Windows Azure cloud?
Muglia said it's still too early to discuss pricing. But the initial Windows Azure Appliance partners (Dell, Fujitsu, Hewlett-Packard and eBay) see big cloud opportunities ahead. And it's easy to see how Microsoft plans to use Windows Azure Appliances to surround and try to conquer Google Apps.

But where do small partners fit in? The answers remain largely unclear.

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