Windows Azure Appliances are still in Microsoft's plans

Based on comments made by a Microsoft Server and Tools division exec this week, it seems the M.I.A. Windows Azure Appliances are still on the Microsoft roadmap.
Written by Mary Jo Foley, Senior Contributing Editor

Microsoft and its server partners have been noticeably mum about Microsoft's planned Windows Azure Appliances, leading to questions as to whether Microsoft had changed its mind about the wisdom of providing customers with a private cloud in a box.

But based on comments made by a Microsoft Server and Tools division exec during his May 10 Jefferies Global Technology, Internet, Media & Telecom Conference presentation, it seems the Azure Appliances are still on the Microsoft roadmap.

In July 2010, Microsoft took the wraps off its plans for the Windows Azure Appliance, a kind of “private-cloud-in-a-box” available from select Microsoft partners. At that time, company officials said that OEMs including HP, Dell and Fujitsu would have Windows Azure Appliances in production and available to customers by the end of 2010. In January 2011, I checked in with Microsoft's announced Windows Azure Appliance partners, some of whom hinted there had been delays. In March, HP began giving off mixed signals as to whether it would offer an Azure-based appliance after all.

Cut to May 10. Charles Di Bona, a General Manager with Server and Tools, was asked by a Jeffries conference attendee about his perception of integrated appliances, such as the ones Oracle is pushing. Here's his response, from a transcript:

"I would hesitate to sort of comment on their (Oracle's) strategy. But, look, those appliances are very interesting offerings.  In some ways it's sort of presenting a large enterprise, obviously, where the footprint is big a large enterprise with a sort of cohesive package where they don't have to muck around with the inner workings, which in many ways is what the cloud does for a much broader audience.

"So, it's an interesting way of sort of appealing to that sort of very high end constituency, which is sort of the sweet spot of what Oracle has done the past, with a sort of integrated offering that replicates in many ways the future of the cloud. Now, we still believe that the public cloud offers certain capabilities, and certain efficiencies that an appliance, a scaled-up appliance like Exadata is not going to offer them, and we think that that's the long-term future of where things are going.  But it's an interesting way of appealing to that very high-end user now before they might feel comfortable going to the cloud."

At this point, I was thinking: Wow! Microsoft has decided to go all in with the public cloud and deemphasize the private cloud, even at the risk of hurting its Windows Server sales. I guess the moderator thought the same, as he subsequently asked, "Microsoft's approach is going to be more lean on that public cloud delivery model?"

Di Bona responded that the Windows Azure Appliances already are rolling out. (Are they? So far, I haven't heard any customers mentioned beyond EBay -- Microsoft's showcase Appliance customer from last summer.) Di Bona's exact words, from the transcript:

"Well, no, we've already announced about a year ago at this point that we've started to rollout some Windows Azure Appliances, Azure Appliances.They are early stage at this point.  But we think of the private cloud based on what we're doing in the public cloud, and the learnings we're getting from the public cloud, and sort of feeding that back into that appliance, which would be more of a private cloud.  It has some of the same characteristics of what Oracle is doing with Exadata.  So, we don't think of it as mutually exclusive, but we think that the learnings we're getting from the public cloud are different and unique in a way that they're not bringing into Exadata."

My take: There has been a shift inside Server and Tools, in terms of pushing more aggressively the ROI/savings/appeal of the public cloud than just a year ago. The Server and Tools folks know customers aren't going to move to the public cloud overnight, however, as Di Bona made clear in his remarks.

"(W)e within Server and Tools, know that Azure is our future in the long run. It's not the near-term future, the near-term future is still servers, right, that's where we monetize," he said. "But, in the very, very long run, Azure is the next instantiation of Server and Tools."

Microsoft execs told me a couple of months ago that the company would provide an update on its Windows Azure Appliance plans at TechEd '11, which kicks off on May 16 in Atlanta. Next week should be interesting....

Update (May 16): Microsoft officials didn't have much of an update at TechEd, after all. Server and Tools General Manager Amy Barzdukas told me today that Microsoft officials would have "more to say soon" about the Azure appliances. She said that all of Microsoft's announcement partners -- eBay, Dell, HP and Fujitsu -- are still onboard and were working with internal "limited production releases" at this time.

Barzdukas said Microsoft is expecting to provide new information before the Worldwide Partner Conference, which is in mid-July. When I asked whether there were technical problems delaying Microsoft and its partners from getting the appliances to market, Barzdukas said that wasn't the case.

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