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PaaS also provides new business models for independent software vendors (ISVs) looking to gain entry into the SaaS market. Today's workforce demands that productivity applications be accessible via a mobile device on a 24x7 basis. As a result, ISVs are moving to a SaaS business model to meet this demand. But many ISVs don't have the capital to compete in SaaS market. Most ISVs lack the ability to build the IT infrastructure necessary to host their own applications and the capability to manage the additional infrastructure. PaaS provides the development environment and infrastructure ISVs need to compete in the SaaS market.

But one can argue that these benefits apply to all PaaS providers. What is it about Microsoft's Azure platform that makes it different compared to Google's App Engine or Force.com? Answer: Microsoft's old faithful, the .NET development platform.

The .NET Advantage

Not only is .NET clearly a better development environment than the competition, but also Microsoft brings scores of developers who know how to use it. By offering .NET as a service, Microsoft has made application portability to the cloud relatively simple. Essentially, the .NET development and runtime environment remain largely unchanged (Azure is using server virtualization underneath, but the application need not be aware). The biggest change is the application's runtime location (Microsoft's data center). Thus, Azure is likely to host thousands of applications, ensuring Microsoft's longevity as an application platform and perhaps vaulting Microsoft to the position of PaaS leader.

However, PaaS (including Windows Azure) also has some serious drawbacks:

• Application portability and Vendor lock-in. Once an application is written to a specific application platform, how difficult would it be to move that application to another PaaS vendor who employs a different application platform?

• Business continuity and availability. Things happen, they always do. What happens when the PaaS provider's data center goes down? Will the PaaS reimburse the IT organization for loss? Does the SLA have specific provisions that fit every IT organizations availability requirements?

These problems aren't unique to Microsoft. Google, Force.com, and Oracle have the same issues. But what are the specific problems for Microsoft and Windows Azure? What might prevent Windows Azure from succeeding?

ISV competition is one concern. Will competing ISV write their applications to Azure? Will ISVs such as Intuit (Quicken),IBM (Notes), or Novell (Groupwise) port their applications to Windows Azure? Every ISV looking to port their application to Azure has to ask themselves, "will Microsoft compete with me at some point"? It's one thing to compete with Microsoft on a Windows OS in the customer's environment, it's another to compete where Microsoft owns the entire environment.