Microsoft’s private cloud offering is particularly suited to the midmarket, which requires cost-effectiveness and good-enough functionality. Microsoft’s mind share among midsize organizations has traditionally been strong, and Windows Server is the dominant OS in this market. Microsoft can use this advantage to expand its private cloud offering. In fact, Gartner research conducted in June 2013 shows that penetration of Hyper-V among SMBs is three times higher than among larger organizations globally. For most SMB clients, Windows is the predominant server platform, and although many SMBs have implemented VMware for their hypervisors for virtualization and the cloud, their focus is still on cost-effectiveness. So they would be willing to shift to Hyper-V and/or leverage management tools that focus on their Windows VMs.
Simply in terms of logistics, Microsoft is often a better fit for midmarket rather than larger enterprises, where broad heterogeneity (both hybrid cloud and platform) will be required. We have advised clients not to deploy System Center 2012 SP1 in large-scale private cloud implementations (more than 10,000 managed catalog objects),5which implies that, although Microsoft has difficulty penetrating large enterprises, it is well-positioned to serve midsize customers.