Thoughts on Microsoft’s Cloud Zeal

Partners Impressed With Microsoft’s Cloud Zeal

5:28 PM EDT Fri. Jun. 04, 2010
Microsoft (NSDQ:MSFT) is “all-in” with cloud computing, and it’s not worried about potential negative impacts the cloud could have on its traditional on-premise software business.At the D8 conference Thursday, the Wall Street Journal‘s Walt Mossberg asked Steve Ballmer whether the cloud represents a threat to Microsoft’s traditional business, and the Microsoft CEO struck a characteristically optimistic tone.

“There’s nothing bad for us in the trend. It’s all good,” Ballmer said. “But it’s a transition and as such, it’s a period of tumult. So we need to be smarter and more vigilant. But not because we’re moving from a world that’s fundamentally good for us to a world that’s not. We’re moving from a world that’s good for us to a world that’s potentially even more good for us.”

Travis Fisher, executive vice president at Inacom Information Systems, a Salisbury, Md.-based solution provider, understands why Microsoft is bullish on the cloud’s future impact on its business.

“Microsoft is going to be able to enjoy a positive pricing delta that factors in the cost of hardware, data backup, and electricity related to an on-premise server deployment,” he said. “They haven’t been able to capitalize on this before.”

Microsoft in February launched Windows Azure, its cloud development platform. Azure’s tight integration with the existing Windows ecosystem means that Microsoft’s army of developers will be able to keep using their Visual Basic and .Net skills as they transition to the cloud. Microsoft has invested vast sums on building the data centers to run Azure, and it’s banking that developers will embrace the platform.

For a company that has made most of its money from on-premise software, Azure was a bit late in coming, but Microsoft partners believe the company is now on the right track.

“I think Microsoft, being the large company that it is, reacted a little slowly to delivering their solutions from above, as this was not ‘their way’ of doing business,” said Steve Hall, CEO of District Computers, a Microsoft Gold partner in Washington, D.C. “But they’ve made a huge shift and invested a ton of money and research into the cloud.”

Azure is a huge bet on Microsoft’s part, but it’s one that comes with certain risks, notes Sandy Bateh, vice president of the Microsoft national alliance at Idea Integration, a Jacksonville, Fla.-based solution provider

“If Ballmer assumes that he will get the business on-premise or in the cloud then it is a win-win for Microsoft. But when you give the customer a choice of moving from an on-premise situation to cloud, then you do open the door to competitors’ cloud options,” said Bateh.

The Role Of BPOS In Microsoft’s Cloud Vision

Another pillar of Microsoft (NSDQ:MSFT)’s cloud strategy is its Business Productivity Online Suite (BPOS), which includes hosted versions of Exchange, Sharepoint and Office Communications Server. Unveiled in 2008, BPOS initially gained the most traction in large enterprises but is now moving downmarket, according to solution providers.BPOS is an example of how Microsoft is doing everything it can to stay ahead of the curve in the cloud space, says Chris Ward, senior solutions architect at Greenpages, a solution provider in Kittery, Maine. Ward has been fielding more and more customer inquiries about BPOS, particularly on the Exchange front.

In Ward’s view, the greater challenge for Microsoft lies in the traditional Office application environment with apps such as Word, Exchange and Powerpoint. That’s a space where Google and Microsoft are going head to head to gain consumer mindshare, but Ward says both companies’ cloud apps fall short.

“Both Google (NSDQ:GOOG) and Microsoft have online-based ‘cloud’ offerings in this space, but they fall way short on user experience and functionality versus the traditional locally installed apps,” he said. “The future here may in fact be more of a cloud-based VDI offering in which users can run the full desktop app via a remote session.”

Much has been made about the Google-Microsoft battle in the cloud, and both companies are clearly paying an inordinate amount of attention to what the other is doing. But for Google, which has a fraction of the breadth of offerings that Microsoft has, the task of positioning itself as a cloud pioneer is simpler.

“The breadth of Microsoft’s offerings and the subsequent complexity this adds to their own messaging is their real challenge,” said Joseph Giegerich, managing partner with Gig Werks, a Yonkers, N.Y.-based solution provider. “Google can focus on the hype of a singular message with their cloud offerings, where as Microsoft has a much more challenging triangulation of story.”

Microsoft will continue to sculpt its cloud messaging at its TechEd conference next week and at its Worldwide Partner Conference in July. Although the cloud stands to disrupt channel partners’ business models in much the same it has affected Microsoft’s traditional software revenue stream, VARs are impressed with the amount of effort that’s going into the company’s cloud strategy.

5 Proven Benefits of Cloud Services

How can your company get started with cloud computing? Well, consider following the market leaders. With a few more months of client experience, Forrester Research recently addressed the major questions that executives have about the adoption of cloud services.

The key benefits that most early adopters report do not start with costs — but rather with business flexibility. According to those that have deployed it, the benefits of cloud computing, in order of importance, are:

Cloud Computing Benefit #1: Improving time-to-application deployment
Cloud platforms give you the option of developing and deploying new applications on existing infrastructure as quickly as desired. Traditional platforms can take up to three or four months to procure, install, and configure, stalling the application deployment process.

Cloud Computing Benefit #2: Aligning IT budgets with application demand
How many Web applications does your organization deploy without exactly knowing how popular they’ll be or how much capacity you’ll need to accommodate that popularity? Many of the early cloud adopters host customer and public-facing Web applications with cloud providers for this reason. They can pay just for the resources they use, hour by hour.

Cloud Computing Benefit #3: Accommodating peaks in demand for data center capacity
Cloud computing is also good for handling episodic spikes in demand for computing, storage, and network resources. Rather than provision for the expected peak of the holiday shopping season, retailers can push the additional demand into a cloud environment. Big batch jobs also fit this model.

Cloud Computing Benefit #4: Delivering applications without raising the budget
Cloud computing gives you the ability to deliver new applications without having to buy systems, avoiding an investment of your firm’s capital in new equipment. Application development and delivery can all be handled using pay-as-you-go operating expenses.

Cloud Computing Benefit #5:  Sharing without putting the data center at risk
Many of the early adopters of cloud computing are looking for an inexpensive and easily accessible way to share information. Medical researchers are an example. Cloud services enable these organizations to host data on public clouds, rather than making their internal data center available to external parties.

Cloud Computing Benefit #6:

 

Cloud Computing Benefit #7:

 

Three Questions to Ask a Cloud Service Provider

1. How do you know if a managed cloud service provider is a good-fit for your business? Forrester concludes that you should ask all providers the following three basic questions:

2. What are your enterprise references and what kinds of applications do those organizations run in your cloud?
For which application scenarios does your cloud environment deliver the maximum flexibility and scalability?

3. What security and reliability commitments do you make to your customers?