How Microsoft can win cloud computing

Microsoft opened Azure data centres in Sydney and Melbourne this week. In theory Australia’s East Coast is just a 14ms ping from Auckland. Realistically most traffic will take longer. It isn’t like having a server in the next room, but close enough.

Australian Azure data centres come at a price. Lifehacker reports many Australian services are more expensive than buying them from Micrsooft’s US or Singapore data centres.

If ping times and latency are important, the extra cost is worth it. If not, then send your data elsewhere.

Azure cloud scale

When it comes to large-scale, multinational cloud services, Microsoft is now second only to Amazon. There are other players, but the mainstream market will almost certainly consolidate around these two players.

IBM is a likely distant third. It will play at a different level with an offering based on managed services. The others will trail in the dust.

For those of us who don’t have computer science qualifications Azure is much easier to deal with. When I tried AWS it took ages to get a simple site working, with Azure my test site was running in minutes.

I’m more impressed by Azure than any other cloud service I’ve seen. Microsoft wraps Azure’s complexity in easy walk-throughs. Some geeks may sneer but many users are more interested in productivity than being clever.

Microsoft’s infrastructure as a service cloud service poses a serious challenge to Amazon’s cloud leadership. In part that’s because it brings the lessons learnt from years of serving up operating systems and software like Microsoft Office to the great unwashed.

Microsoft learns, loves Open Source

Yet there’s something more profound going on. Microsoft has learnt the most important lessons from its rise and fall. There’s no proprietary lock-in at Azure. Open source is as welcome as any other software. The company recognises it no longer has a software monopoly.

It goes further. Microsoft has learnt not locking customers in can be more profitable. And ironically given Microsoft’s woeful track record during the monopoly years, it has learnt to value security. Azure feels more secure than any other cloud service I’ve played with.

Microsoft still has a powerful brand with computer professionals. It knows how to nurture the breed. Microsoft has also built links with developers. The company talks their language — look at TechEd for evidence of just how close Microsoft is to CIOs and developers.

Azure already paying dividends

Last week Microsoft announced its first quarter results. Earnings were up 25 percent year-on-year to US$23 billion. Profits looked good at US$4.5 billion — and that’s after taking a US$1.1 billion charge from the Nokia deal.

Cloud services, which includes Azure and Office 365, were the high point. Sales jumped a massive 128 percent to US$1.2 billion. That’s about five percent of total revenue, but it’s growing fast. Office 365 now has seven million subscribers.

Microsoft Surface sold US$900 million for the quarter — not bad for a product some critics say is dead. Surface is a great device. In truth, Microsoft remains a money-making machine and Azure is an important cog.

4 thoughts on “How Microsoft can win cloud computing

    • Agree. It looks like Azure is sustainable. I don’t think AWS will go away — the two will dominate for the foreseeable future — but at some point Amazon is going to require a profit from the business and that’ll mean cranking up prices or downgrading service.

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      • what if they wake up one day and decide to return to a focus on books? always a risk if its not paying its own way. its a risk profile to consider in the public cloud.

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  1. Pingback: Cloud latency, data centres and the lure of Australia | Bill Bennett

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