Microsoft’s Windows Azure Platform Gains Traction Among Hosting Providers

This week at PDC 2009, Microsoft announced three hosting providers who have utilized the Windows Azure platform to build new services coming to market, validating that the Windows Azure platform is generating new business opportunities for hosters and their customers.

• GoGrid wanted to extend its services and enable its customers to develop, test, deploy, and back-up Windows Azure platform applications efficiently and cost-effectively. GoGrid partnered with Blue Star Infotech to develop a suite of tools that help customers seamlessly build and deploy applications for the Windows Azure platform, allowing it to extend its service offerings and maintain a competitive advantage, meet the needs of existing customers while attracting new customers, and continue to offer its customers cloud infrastructure solutions that reduce costly hardware investments.
• T-Systems: the integration subsidiary of Deutsche Telekom in EMEA is building out a solution with Windows Azure and Silverlight that gives customers centralized web access to critical business information from devices connected anywhere on the DT network. Early applications of the platform include retrieving data from office security cameras and monitoring home energy consumption.

• Norwegian Hoster/ISV Mamut is using Windows Azure Storage Services and SQL Azure Database to provide highly scalable, always-available offsite backup, storage and retrieval of critical business systems data.

Today we discuss the announcements, along with the impact the Window's Azure platform will haveon the hosting industry, with John Zanni, general manager for the Worldwide Software-plus-Services Industry for the Communications Sector at Microsoft. 

Q: At PDC, Microsoft announced several hosting providers that have offerings coming to market based on the Windows Azure platform. Could you give us your perspective on these offerings?
A: I speak with partners and hosters frequently, and make it a point to understand what is top of mind for them. As the ambassador to hosters from Microsoft, it's my job to surface the things hosters are most interested in, such as the Windows Azure platform, and develop new and innovative solutions that they can get behind and win with in the marketplace.  We're very excited to showcase the innovative offerings that these partners have coming to market based on the Windows Azure platform. This is further evidence of how Microsoft and its hosting partners are collaborating to win together as the world increasingly moves towards software plus services. T-Systems, for example, has built two sample applications that take advantage of the Windows Azure platform - one that captures photos from monitoring cameras, and one that captures home appliance data to monitor energy consumption. As we move into 2010, we're eager to see how other hosters will leverage the Windows Azure platform to uncover new business opportunities.

Q: How will the Windows Azure platform enable Microsoft hosting partners to generate new business and revenue opportunities?
A: Many Microsoft hosting partners are exploring ways to sell Windows Azure platform-based services as a complement to their existing business. Since the platform includes minimal up-front commitment and easier ways to increase and decrease computing resources use, hosters' customers can also be more agile in responding to business needs and taking solutions to market. Hosting providers could package Windows Azure platform capabilities into finished services like cloud storage, business continuity, or a cloud database enabling more solutions to sell to their end-customers.

GoGrid is a good example of how one of our partners is doing this today. GoGrid's existing infrastructure integrates with the Windows Azure Lifecycle Management service and includes pre-configured development environments, enabling developers to build applications and publish them to Windows Azure. Developers can rapidly provision unlimited test servers for powerful load testing with a cost-effective, pay-as-you-go pricing model.

Additionally, Microsoft offers hosting providers access to our vast partner ecosystem, as well as training and support resources to serve their end customer and increase satisfaction. We have a proven track record of partnering with hosters and are truly committed to helping them deliver enterprise-class solutions and rich user experiences to developers, designers, SMBs, enterprises, and consumers by leveraging the Windows hosting platform and services.

Q: How do you see Windows Azure as relevant for Microsoft's hosting partners?
A: The Windows Azure platform provides many benefits for hosting providers. Developers and ISVs have common needs to complete their applications that can be met by hosters. The Windows Azure platform allows hosters to expand geographically by offering hosting solutions in markets where they don't have infrastructure, and provide customer assurance by using Windows Azure for redundancy and increased capacity. Additionally, hosters are able to quickly add new services for their customers without having to consider data center expansion as a result of the efficiency they can gain from Windows Azure.

Q: From a hosting perspective, how does the Windows Azure platform compare to competitive offerings?
A: In a word, the key differentiator for the Windows Azure platform is interoperability. The designers of the Windows Azure platform recognized that Microsoft's success as a cloud platform ecosystem provider requires a commitment to other technologies as much as its own.  Hosting providers can choose to use as much or as little of Microsoft's technology as they need and still deploy to the Windows Azure platform; remaining inside the Microsoft platform ecosystem.

The Windows Azure platform also treats other vendor's products and open source technologies as first class citizens alongside Microsoft's offerings. A good example is that in addition to .NET languages, Windows Azure enables writing applications in PHP and Java or others.

In addition, as I mentioned earlier, Microsoft hosting partners have access to Microsoft's vast training and support resources to serve their end customer and increase satisfaction.

Q: There has been concern in the past among Microsoft's hosting partners that Microsoft will become a direct competitor to them with the Windows Azure platform. Does Microsoft have a strategy for integrating partners when it comes to the Windows Azure platform?
A: Microsoft will continue supporting partners interested in providing hosted infrastructure to developers. Our goal is to provide customers and partners the flexibility to choose the IT infrastructure solutions that best suits their business and technical needs. The spectrum of these solutions spans on-premises, partner datacenter, and cloud (Windows Azure) resources. Our vision is to provide a consistent development, deployment, and management experience across on-premises and cloud resources. 

As hosters consider adding capacity, we are encouraging them do a cost/benefit analysis to understand the optimal mechanism to save costs, get geo-scale, and best serve their customers. While it's true that some hosters that are committed to only providing offerings based on their own infrastructure may see the Windows Azure platform as competitive, we encourage them to leverage the scalable multi-tenancy available through Windows Server with Hyper-V and System Center to provide their customers with the elastic infrastructure the market is demanding.

Q: What business opportunities will the Windows Azure platform create for Microsoft's telco partners?
A: Our telco partners can profit from the Windows Azure platform in two key ways:  

First, by utilizing the Windows Azure platform as a centralized integration point for data from different devices and locations on their network, they can easily and economically give customers new ways to capture and leverage the information locked in the computers, devices and equipment they connect to the network. We have telco partners today building data warehouses to capture, analyze, and report on data from cameras, home monitoring equipment, voice calls, etc.

Second, as the Windows Azure platform evolves and more features are added to support billing, syndication and remote system administration, there will be a golden opportunity for telcos to increase their average revenue per user (ARPU) by up-selling value-added Windows Azure platform-based solutions to their existing small business customers. These may be solutions they build themselves, or 3rd party SaaS applications running on the Windows Azure platform the telcos resell.