'Time right' for Microsoft to enter IaaS biz

With enterprise customers clamoring for tools to manage hybrid IT environments, Microsoft is aiming to meet this need with recently introduced infrastructure on-demand products, exec shares.
Written by Jamie Yap, Contributor

Microsoft is betting on customers demanding for the ability to manage both on-premise and cloud-based IT infrastructure resources when it decided to go into the infrastructure-as-a-service (IaaS) layer of the cloud computing stack, one executive reveals.

Arun Ulagaratchagan, general manager of server and tools division at Microsoft Asia-Pacific, noted that now is the "right time" for Redmond to introduce IaaS capabilities to its Azure platform, following the earlier launches of its Windows Server 2012 and Windows System Center 2012 offerings.

This is because taken holistically, customers can now deploy both on-premise and cloud applications and manage the two environments seamlessly with "a single pane of glass" clarity for IT administrators, the executive explained in an interview Wednesday.

"If we gave them an IaaS offering earlier [than now], customers still had to manage their existing on-premise infrastructure differently from the way they manage their cloud-based infrastructure. I'm not sure we're really solving a big problem for them," he stated.

The software giant had announced on Jun. 6 a slew of updates for its Azure platform. These include the Windows Azure Virtual Machines that allows enterprises to move their virtual hard disks across on-premise and cloud servers and the Windows Azure Virtual Network, which lets people provision and manage virtual private networks as well as extend on-premise networks into the cloud, the company stated in a press release.

Hybrid environments offer growth opportunities
Ulagaratchagan pointed out that Microsoft is banking on customers wanting "symmetry" in terms of managing their hybrid IT environments to grow its cloud business. They want all their applications, regardless whether it is on premise or on cloud, to work together, but also desire having their own discretion to deploy apps and manage their IT infrastructure, he added.

"If you take what customers have to pay to do it themselves [versus] what we charge for Azure, it's radically cheaper for customers. We can charge and make money yet save customers a ton of money too," said the executive, spelling out Microsoft's value proposition.

But Microsoft is not the only IT vendor targeting this customer segment. At its Discover event last week, Hewlett-Packard announced its intentions in the hybrid IT space as well. Steve Dietch, vice president of worldwide cloud at HP Enterprise group, had said most customers will move toward a hybrid cloud deployment model and it has pinned its hopes on providing products to address this trend.

Asked how the latest Azure products would be received by Asian customers, Ulagaratchagan said both mature and emerging markets within the region will find uses for its offerings. Singapore, for instance, is a datacenter hub with a lot of local hosting providers and they will see the opportunity with Microsoft's IaaS tools to burst or scale worldwide, particularly when dealing with multinational companies (MNCs), he stated.

Radhesh Balakrishnan, senior director for Windows Azure and SQL Azure at Microsoft Asia-Pacific, who was present at the same interview, added that for emerging markets, companies and startups can benefit from saving on costs and complexity to get computing infrastructure.

They can now connect to the cloud for their data center needs to support and grow their business straightaway, he said.

Ulagaratchagan also acknowledged that by introducing IaaS capabilities, Redmond would "definitely" become a competitor to incumbents such as Amazon Web Services (AWS).

However, the executive argued that while Amazon has clearly been a leader in the space, the company did not have their business rivals in mind when launching their latest products. With almost 75 percent of the world's servers running on Windows, Redmond introduced the IaaS services to meet these customers' needs, he explained.

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