Great article by Alex Wilhelm on Microsoft Azure.
Why Azure is the linchpin of the firm’s new ‘devices and services’ strategy.
Azure’s origins
Azure, Microsoft’s Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) service, is a well-known product that has been in the market for years. However, less well-known outside of Microsoft are the origins of the project.
Interestingly, Azure did not begin life as a new product, straight from a drawing board. Instead, it is the natural outgrowth of a second Microsoft product that you have likely heard of: “Azure started off by basically taking some of the core, underlying infrastructure of Bing.”
Bing is not minor undertaking, to be clear. It controls double digit market share on its own, and when combined with the share of search that it powers via a partnership with Yahoo, is the key second voice in search. Certainly, Google continues to rule that specific market niche the world around, but Bing cannot be dismissed.
As you might expect, Bing and Azure have remained close, given their origins. Azure may have started from Bing, but things are “now the exact opposite: all of the Bing apps on Windows 8, for example, Bing news, and Bing stocks, run on Azure.”
What was once the progeny is now the foundation.
Azure is growing rapidly, as you likely expected, given the rising profile of the cloud in nearly every technology space. Microsoft has doubled the raw compute capability of Azure in the last year. And as Satya explained, much of that growth has been due to external demand.
Devices and services
To properly place Azure and the cloud into the larger context of Microsoft, it’s key to understand what Microsoft’s corporate strategy is, and where the company is headed.
Much has been made of the firm’s move from a purely software company into a firm that provides devices and services. Devices, in the context of Azure, are less important than the idea of selling services; the devices in this case are simply what the services run on. For this article, we set them aside.
What does it mean to provide a service? Microsoft has generated tens of billions in profit selling software in a box, and software via download. The idea of generating revenues from one-off software sales has been enormously successful for the company. However, the market is changing.
The interconnectedness of computers, and all computing-enabled devices – smartphones and tablets, for example – have made one-off software unwieldy, as customers want their tools to be on all of the platforms, and work in harmony. It takes time, however, to move from a purely transactional software company to one that vends services on a subscription basis.
Given the complexity of that transition, one would expect to find transitional products in place, to help move users and enterprise customers from one paradigm to the next. Office 365 is an example of such a product, fusing a desktop experience with a set of cloud-based tools that represent Microsoft’s concept of providing services.
Azure is the platform that Microsoft’s growing set of services will run on. Satya phrased it in the following way: “Microsoft’s cloud strategy is in support of these really defining things that we’re doing.”
Azure’s rising profile
Such a strategy puts Azure directly in the middle of the rebirth of Microsoft. As it is the product that will undergird much of the company’s new products – indeed, does already – it will play a key role in nearly every step of the company’s new direction.
It’s important to keep in mind, however, that although Microsoft is responding to market trends, and pivoting its products to better align with the future, it faces significant headwinds. Smaller companies are blazing trails more quickly than it can, as they don’t have millions of legacy customers to at once serve, placate, and transition. Therefore, as we discuss the company’s plans, it is important to understand that even the best intentions can lead to mediocre results. So far Microsoft’s plan appears to be working, but it is early innings yet.
Microsoft is completely cognizant of the size of bet it has made on Azure. After noting that it is in support of a great number of its products, Satya went on to state that “a lot of what we do in the cloud is to make Windows 8 great.”
Anyone who has even passing hands-on knowledge of Windows 8 knows that this is the case; the apps from Microsoft that ship with Windows 8 are built on Azure, as we noted above. If you didn’t have Azure, you couldn’t have Windows 8 in its current form. Satya echoed this: “The way I think about Azure is as the underpinning of everything that we are doing in the cloud. You could even say that a lot of the motivation for Azure is that we need it for our own cloud infrastructure.” As Azure was born from Bing, that is hardly surprising.
Azure runs more than the Bing apps for Windows 8, however, giving Microsoft a complex set of first-party demands. Referencing the set of ‘workloads’ that Microsoft products require from cloud tools, Satya explained that each has data and processing needs that are unique. Given that reality, the company’s “strategy in a nutshell for Azure is to build for our own first party usage and make it available to every enterprise, and every enterprise ISV, or any other organization.”
Continue reading Microsoft’s cloud vision.
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