Microsoft Says Its Future in the Cloud Is Bright

In case there was any doubt, Microsoft made it clear on Monday that it sees its future in the cloud. It unveiled a “wave” of enterprise cloud products and services—from Windows Server and System Center to Visual Studio, Windows Intune, SQL Server and Dynamics, to a new Windows Azure U.S. Government Cloud.

“The thing that I’m most excited about right now about our enterprise business is the new growth,” Satya Nadella, executive vice president of Cloud and Enterprise at Microsoft, said at a press conference Monday evening. While Microsoft’s enterprise infrastructure business is a more than respectable $19 billion business, “$2 trillion is at play as the world shifts to the cloud.”

And while some industry-watchers have wondered whether Microsoft remains relevant in the post-PC era, Nadella says Microsoft is perfectly positioned to be lead the enterprise cloud era.

“As of late, there has been a lot of interest in what I call the commercial business, which spans nearly every area of enterprise IT and represents about 58 percent of Microsoft’s total revenue,” he said in a blog post. It’s a critical business for us, with great momentum and one to which we are incredibly committed.”

“But as people look to our commercial business in this age of cloud computing, big data and the consumerization of IT, people are asking questions about our future strength in the enterprise,” he added. “Will Microsoft continue to be at the core of business computing in, say, 10 years? I’ll be honest that there’s a little déjà vu in that question; 10 years ago many people doubted our ability to be an enterprise company and today we surely are.”

3 Keys to Delivering the Enterprise Cloud

Nadella says there are three keys to being relevant in the cloud:

• SaaS applications drive infrastructure, he says, so you must have top-notch, first-party SaaS applications that run on your cloud. First-party apps are an important differentiator, he says, because running apps on your own cloud helps you understand the perspective of your customers.

  Just as important, he notes, is running a breadth of different SaaS applications, which means you can’t sugar-coat your cloud’s performance by optimizing it for a particular application. He points to Microsoft’s cloud-based applications, from Office 365, Dynamics CRM and Yammer to Outlook.com, Bing, Xbox Live and more than 200 other services.

  “The widespread use of services like Office 365 provides a foundation for other critical cloud technologies that enterprises will adopt, such as identity and application management,” he says.

• You must operate a public cloud at massive, global scale, that supports a broad range of third-parties with fully supported platform and infrastructure services. Windows Azure, he notes, is available in 109 countries (including its recent debut in China) and supports eight languages and 19 currencies. It also has $15 billion in global data infrastructure investment supporting it.
• You must deliver true hybrid cloud capabilities that provide multi-cloud mobility. “When it comes to providing public cloud-class infrastructure to others for building their own clouds, I would say we’re leading [our competitors],” Nadella says, noting that Microsoft’s infrastructure solutions—like Windows Server 2012 R2 and System Center 2012 R2—give customers the ability to build their own Azure-like clouds.

  “You need to be able to also take the same software that you use to run your cloud and make it available to others to stand up their own clouds,” he says. The result is a hybrid solution that allows customers to move across clouds without friction.

“These areas guide our enterprise cloud strategy, investments and execution,” Nadella says. “These are the criteria by which I evaluate our progress and compare us against our competition, both new and old. I’d say we have done very good work. Do we have room to improve? Always. But at the end of the day, when I look across those three areas, we are the only cloud provider—new or old—who is delivering in all three to help enterprises realize the promise of the cloud.”

Windows Azure Gets FedRAMP Authorization

To underscore his point, Nadella points to the new Windows Azure U.S. Government Cloud, which provides U.S. government customers with a dedicated community cloud for data, applications and infrastructure.

The cloud will be hosted in the continental U.S. and be managed by U.S. personnel. To build the cloud, Nadella says Windows Azure had to be granted FedRAMP Joint Authorization Board Provisional Authority to Operate, making it the first public cloud to attain this level of government authorization.

To bring down barriers to cloud adoption and to support a hybrid approach to cloud adoption, Microsoft plans to offer its Enterprise Agreement (EA) customers access to discounted Windows Azure prices beginning Nov. 1. Microsoft says the discounts will be available regardless of upfront commitment, without overuse penalties and with the flexibility of annual payments.

In addition, Microsoft announced a strategic partnership with Equinix, through which customers will be able to connect their networks with Windows Azure at Equinix exchange locations, providing greater throughput availability and security features.

Windows Server and System Provide Private Cloud Building Blocks

Microsoft will release Windows Server 2012 R2 and System Center 2012 R2 on Oct. 18. Together, Microsoft says they will allow customers to build data centers with Hyper-V for high-scale virtualization, high-performance storage at “dramatically lower costs,” built-in software-defined networking and hybrid business continuity. The new Windows Azure Pack will run on top of both, giving enterprises and service providers the ability to deliver self-service infrastructure and platforms.

Microsoft will also release .NET 4.5.1 on Oct. 18.

Next week, the company will release a second preview of SQL Server 2014, which features new in-memory technologies to give customers a performance boost (Microsoft says between 10 times and 30 times) without having application rewrites or new hardware. Used with Azure, customers will be able to use SQL Server 2014 for built-in cloud backup and disaster recovery.

On the big data analytics front, Microsfot will release Windows Azure HDInsight Service later in October. Azure HDInsight Service is an Apache Hadoop-based service that works with both SQL Server and Microsoft’s business intelligence tools—Microsoft Excel and Power BI for Office 365.

The company will also release Windows Intune on Oct. 18. It combines with System Center Configuration Manager to help IT departments provide security-enhanced access to applications and data via mobile devices, whether those devices run Windows, iOS or Android.

Additionally, Windows Server 2012 R2 will add the Microsoft Remote Desktop app, which provides access to PCs and virtual desktops on a number of different devices and platforms, including Windows, Windows RT, iOS, OS X and Android.

Microsoft has already made available Microsoft Dynamics NAV 2013 R2 to provide small and mid-sized businesses with interoperability with Office 365, full multi-tenant support and a slew of tools to support large-scale hosting on Windows Azure. Later this month, the company will make Microsoft Dynamics CRM Online Fall ’13 available, with an on-premises version expected later in the fall.

Thor Olavsrud covers IT Security, Big Data, Open Source, Microsoft Tools and Servers for CIO.com. Follow Thor on Twitter @ThorOlavsrud. Follow everything from CIO.com on Twitter @CIOonline, Facebook, Google + and LinkedIn. Email Thor at tolavsrud@cio.com