Microsoft Windows Azure Cloud Arrives

Microsoft Windows Azure Cloud Arrives

MICROSOFTWindows Azure, Microsoft's cloud for independent software vendors and partners, officially debuts with a paid pricing model today. Matt Weinberger offers some timely Azure perspectives over on The VAR Guy. But I'd like to weigh in with a few perspectives for managed services providers -- particularly thoughts on Azure vs. Microsoft Business Productivity Online Suite. Here they are.

A lot of people have been betting heavily against Microsoft. Disruptive technologies and innovative rivals -- Apple, Cloud Computing, Open Source, Red Hat, SaaS, Virtualization, VMware, just to name a few -- seem to be chipping away at Microsoft's software empire. Yet, Microsoft announced record second-quarter results on January 28.

How is that possible? Certainly, Windows 7 arrived to positive reviews. And people often forget that up-and-coming platforms like SharePoint have pushed beyond the $1 billion annual revenue mark.

Pros and Cons

Still, Microsoft's cloud strategy remains a big concern for many solutions providers. Some skeptics worry Microsoft BPOS (Business Productivity Online Suite) will erode margins in the hosted Exchange, hosted SharePoint and hosted unified communications markets.

Some VARs and MSPs have high hopes for BPOS. But I think channel partners would be wiser to keep an eye on Windows Azure. The reason: Microsoft is reverting to an old strategy to make Azure a success. The company worked overtime to ensure Azure has a critical mass of ISVs -- from traditional software companies to open source alternatives.

For VARs and MSPs, Azure offers two potential recurring revenue opportunities:
  • First, VARs and MSPs can potentially shift some customers to existing, vendor-managed applications in the Azure cloud.
  • Second, VARs and MSPs can set up their own application platforms and services in Azure. Whether it's email, CRM or unified communications, Azure could become an expandable platform for solutions providers that don't want to build out their own data centers and hosted infrastructure.
That trend has already started in the Amazon cloud, where solutions providers like Levementum and OpenBI have been deploying customer applications for more than year. I expect that trend to repeat itself in the Azure cloud.

Who's In Control?

How does Azure differ from Microsoft BPOS?
  • Simply put, Microsoft controls the BPOS application suite. For the most part, VARs and MSPs that sell BPOS are merely sales agents.
  • With Azure, VARs and MSPs can select, deploy, control and maintain the applications on top of Microsoft's Azure foundation. In other words, Azure offers more partner freedom than BPOS at the application level.
When it comes to cloud computing, MSPs would be wise to take two steps:
  1. Learn how to monitor and manage customer applications regardless of where they reside (on premise or in a third-party cloud).
  2. Learn how to deploy at least one application in a third-party cloud (Amazon Web Services, Rackspace Cloud, Windows Azure, etc.).
Instead of fearing the cloud movement, you need to live it, test it, and then make informed recommendations to your customers.

Azure officially debuts today. And I suspect it won't be going away anytime soon. In fact, I think Azure will become Microsoft's next big Windows hit. Whether you plan to cooperate or compete with Azure, you need to understand it.
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