There is a distinct impression in the IT Industry that Microsoft is a has-been PC company and an underdog in the cloud computing arena. But the statistics say otherwise, because over the last 10 years, Microsoft’s net annual income has increased 215% and is now (Jan 2012) at an astounding $23 billion.
Of this, $6.6 billion in profits last year came from their data centers. Besides, Microsoft now has a huge ace in the cloud, so to speak, with the $8.5 billion acquisition of Skype.
However, perceptions matter, and the hotshot startups in Silicon Valley prefer the more nimble and cost-effective services of cloud application hosting and development platforms like Heroku. It is trendy in the Valley to develop and host applications on Heroku, and deploy full machines to the cloud on the Amazon EC2.
To a certain extent, I think Microsoft is itself responsible for this loss. Apart from an awful legacy as the big bad wolf that gobbles up valley startups, Microsoft has also not been able to free itself entirely from their PC strategy. They created Windows Azure as an operating system and a platform on the cloud in such a way that developers who chose to go down this path would not only have to use the Windows cloud as the platform for development, but also as the only platform able to host and run the applications.
Trying to hold on to customers by making applications incompatible with any other platform may have worked on the PC because of Microsoft’s absolute dominance in the market. However, the cloud is a different creature where Microsoft, as the popular perception goes, is the new guy. So, developers in the Valley ignored Microsoft’s strategy and continued doing business with Amazon, Salesforce, GoGrid, Rackspace and other competitors.
The $6.6 billion they racked up is mainly from corporate customers loyal to Microsoft who are likely to move to the Cloud at some point. It has now dawned on Microsoft that this $6.6 billion is petty cash, and they need to change strategy to avoid losing the $3 trillion corporate IT market as it moves to the Cloud. So as 2012 begins, Microsoft is about to offer cloud customers the ability to host persistent virtual machines.
This will mean that a customer does not have to stick to Microsoft tools like Visual Studio and Windows servers on Azure. They can just as well deploy a Linux machine and develop their cloud applications however they want. Microsoft recently added support for Node.js on the cloud, and they are now allowing Node.js applications hosted anywhere to take advantage of Windows Azure storage services.
This is a big shift, and it seems to me that this new strategy has the seeds for a huge uptake in demand for Microsoft’s Windows Azure Platform as a Service (PaaS). Take a look at how Microsoft is now marketing Windows Azure, and you may soon agree with me about why it has so much potential to dominate the cloud computing arena.
Microsoft is actually getting in touch with startups and offering them free software and developer tools, so that customers are able to develop applications for free. They will, of course, end up paying Microsoft to host the applications as a service on Azure. Given this bottom-up infrastructure and support, Microsoft’s high performance data centers, and the new ability to host persistent virtual machines, the Windows Cloud looks like it has a bright future going into 2012 and beyond.
Author: Cloud Consultant at CIONNE.com.
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