by Shane O'Neill

Microsoft TechEd: More Cloud Plan Details

Jun 07, 2010
Cloud ComputingIT LeadershipSecurity

In an exclusive interview, Microsoft's Bob Muglia shares details on what Microsoft's cloud strategy will mean for customers — and the company's business model. At its TechEd event this week, Microsoft will find out if customers are going to buy into this vision.

As Microsoft clarifies its cloud computing strategy this week at its TechEd conference in New Orleans, president of Microsoft’s server and tools business Bob Muglia sat down with to share guidance for CIOs considering a move to the cloud.

But before a CIO chooses a cloud provider, be it Microsoft or a Microsoft partner, Google, Amazon or others, there are key questions to ask, such as: How responsive is the cloud company? How much access does the cloud provider offer or deny? What does the cloud provider require of you? How prepared is the cloud provider to answer due-diligence questions about physical security and disaster recovery?

How you find the right cloud provider depends on your business, according to industry analysts.

“A manufacturing company isn’t going to have the same checklist as a service company or retailer,” says Bernard Golden, CEO of cloud consulting firm HyperStratus and blogger. “But there is a consistent set of things to look at. Some of them are specific to cloud providers, but a lot of them are the same kinds of things you had to look at in outsourcing or any other service provider contract.”

Microsoft, in its usual fashion, aims to offer cloud options for everyone through a public cloud environment hosted by Redmond itself, or by one of its partners, as well as private cloud technology that sits behind an organization’s own firewall.

During his keynote this morning at TechEd, Muglia stated that more than 40 million customers are paying for cloud services from Microsoft, such as Exchange and SharePoint, across 9,000 business customers and more than 500 government entities.

Bob Muglia on Microsoft helping customers move to the cloud.

In an interview late last week, Muglia said that, first and foremost, a business needs to think through how much control they want to have over data, the security and compliance needs, as well as the level of customization its environment requires.

Businesses also need to know that the cloud isn’t an all or nothing proposition. Most companies will adopt a hybrid approach where they keep mission-critical applications on-premise and move workloads like e-mail or CRM to the cloud.

New Burden on Microsoft

What does cloud computing really mean for Microsoft? Well, it fundamentally changes Redmond’s long-standing business model. Instead of building a software products and shipping them to people, Microsoft will also provides a service that must have high availability and high degrees of security and compliance.

“It’s a 180 degree shift in terms of what we do as an organization, and frankly our relationship with the customer,” says Muglia.

But in a good way, he stresses. The cloud model will improve on Microsoft’s current method by which Redmond delivers a new version of a product and companies deploy it now, in a year or maybe they never deploy it, he says.

“It can be frustrating for everyone. The customer says, ‘Hey, we want this but it’s too much of a pain to upgrade. It’s not worth it. I’m not going to bother.’ And of course we say, ‘You’d be so much better off if you did,'” says Muglia.

“So in that case they are not experiencing what our technology can deliver in terms of productivity improvements and cost savings, and it is not as effective all around for them or us.”

With the cloud, Microsoft creates a contract where the burden of keeping customers seamlessly and compatibly up-to-date is on Microsoft.

In a way, Microsoft has always had to facilitate upgrades, but in the end the onus was on the customer to complete the deployment. The cloud changes that.

“There’s a profound difference between doing it yourself versus having a vendor provide a service you can just consume,” says Muglia. “You won’t have to deal with all the hardware and maintenance that you’ve been throwing dollars and people and time and energy at.”

The Cloud Options

Whether it’s a public or private cloud, or a mix of both models, an enterprise must assess its needs and determine which data, applications and workloads need to be on-premise and which are better off in a cloud environment.

“Utilizing a combination of both public and private cloud models, and having the ability to port data between these, is truly maximizing the value and benefits of cloud computing,” says Vanessa Alvarez, an industry analyst with Frost & Sullivan. “It’s not a question about utilizing one or the other, but about how each model can be leveraged.”

If you’re a Microsoft shop today, your cloud options break down like this: You can run a private cloud in your own data center where you will have the most control but will have all the hardware and staff costs; you can use a Microsoft partner for a lower cost, but slightly less control; or you can use Microsoft cloud services run from one of Redmond’s data centers for even less cost but since it’s a very broad, fixed price environment, the user will have even less control.

“Microsoft is the only vendor in the industry offering all three of these choices to our customers,” says Muglia. “We’re unique in that no other vendor has the same level of experience and expertise in software and services.” Of course, Microsoft’s cloud rivals, including VMware, Citrix, Cisco, Google and Amazon, would argue otherwise.

If a business wants to go outside the firewall in a cloud environment, Muglia notes, the main difference between using Microsoft and one of its hosting partners is that a partner’s cloud can be customized better to your environment.

“We’ll run your entire infrastructure for you, and we’ll give you global scale,” he says. “But we’re not going to give you every option in the world. If you want to have a set of services that interact specifically with your environment, working with a hosting partner may be a good way to do that.”

Shane O’Neill is a senior writer at Follow him on Twitter at Follow everything from on Twitter at