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Microsoft Details Major Release Wave of Cloud Services

Satya Nadella, Microsoft's top enterprise executive, on Monday made a rare public appearance to outline the company's next enterprise software and cloud deliverables.

At a press conference held at Yammer's San Francisco office, Nadella, Microsoft's executive vice president for cloud and enterprise, underscored what's at stake for Microsoft in its bid to remain a leader via the cloud in the post-PC era. He acknowledged that Microsoft's enterprise business faces competition from Amazon Web Services, Google, Salesforce.com and VMware. However, Nadella contended that Microsoft's portfolio is not only competitive with those of its key rivals, but that the company is the only player that can tie everything together -- from the device to the datacenter and the cloud -- and deliver Software as a Service (SaaS) applications.

"We have different competitors in all of those dimensions [cloud infrastructure, datacenter virtualization and SaaS] but I think it takes someone to really stitch these things together," he said.

Nadella described the new and updated enterprise cloud products and services to come, including Windows Server 2012 R2, System Center 2012 R2, .NET 4.5.1 and a new release of Windows Intune, all slated to ship on Oct. 18. He also said that the next major release of Microsoft's Dynamics CRM solution and its new HDInsight big data analytics service are set for release later this month, as well as a dedicated government version of Windows Azure. The company also will be releasing a second preview version of SQL Server 2014 next week.

"This is one of the biggest release waves I have witnessed inside of Microsoft," Nadella said.

Although Microsoft had already announced those release dates, Nadella's presence was clearly aimed at evangelizing Microsoft's enterprise strategy along cloud computing lines. Nadella talked up Microsoft's view of its cloud portfolio on three fronts: its SaaS solutions (Office 365 and Dynamics CRM); its "honest-to-god, at-scale, global public cloud" Windows Azure; and its server products, which include the revamped Windows Server, Hyper-V and System Center along with the new Windows Azure Pack, which lets IT organizations manage Windows Azure-hosted clouds in house.

Nadella admitted that Google and Salesforce.com are able SaaS competitors but argued that Office 365 is the most ubiquitous SaaS application in the world. Amazon Web Services is leading in the public cloud race, he admitted, but claimed Windows Azure is the second-most widely used cloud service. And he argued that Windows Server is still more widely used than Linux-based systems.

"We are quickly catching up in many dimensions," he said. "We feel very good at the progress."

Boundary-less Datacenters
Nadella laid out the company's vision of a "boundary-less datacenter," a cloud infrastructure enabled by its server products. For example with the Windows Azure Pack, an IT pro can set up a cloud in-house and extend it to Windows Azure or a third-party provider.

"That notion of a boundary-less ability to both back up what you have and use the public cloud, the service provider cloud, as well as your own cloud, with no friction, I think is what we want to realize with what we are doing in our cloud infrastructure space," he said.

Microsoft also remains committed to becoming more open, Nadella said, pointing to a partnership with Oracle, announced last summer, that will make it possible to run Oracle software on Windows Server Hyper-V and in Windows Azure, as an example. Nadella also highlighted the new Windows Azure-based HDInsight service, scheduled for release later this month. Microsoft's HDInsight is based on the open source Apache Hadoop big data implementation. Microsoft is broadening device management with its Windows Intune service, which supports iOS- and Android-based products, as well as Windows devices. Additionally, Windows Server 2012 R2 will get a new Microsoft Remote Desktop application, which aims to provide easy access to PCs and virtual desktops on range of devices and platforms, including Windows, Windows RT, iOS, OS X and Android. (The app will be available for download in app stores later this month, the company indicated.)

"Most people define openness as anything which is non-Windows," Nadella said. "My definition of openness is Windows and everything, because that's actually the reality."

When asked how Microsoft is building robustness into its cloud, Nadella was quick to admit that "building a multitenant service that has predictable SLA [service level agreement] performance and delivery is the most challenging systems problem." He added that the wide range of systems running on Windows Azure -- Warner Brothers, Aston Martin, Temenos' SaaS-based banking app and even Microsoft's own "Halo" console game -- "keeps us honest by not getting hijacked by just one architectural pattern."

"Enterprise workloads are pretty diverse," Nadella added. "They change from industry to industry, and you have to really think about how you solve for resource governance needs, and the noisy neighbor needs, at scale. And then you've got to teach developers how to build applications for [the cloud]. Building applications like you built in the enterprise where you assumed perfection of the infrastructure is not the way to have a reliable enterprise application of the future in the cloud."

Nadella effectively dodged a reporter's question regarding enterprise concerns about security in the cloud that might be amplified by recent revelations about NSA activities.

"My belief is that the trend toward cloud adoption is secular in the sense that the economic and architectural benefits far outweigh any current issues we may have with regulations as they are being working out and the geopolitics around it," he said. "In the long run, [the cloud] is definitely going to happen. ... The way these things will settle, only time will tell."

Microsoft's Windows Azure for U.S. government customers will be called "Windows Azure U.S. Government Cloud." It will provide a dedicated community cloud for data, apps and infrastructure hosted in the continental U.S. and managed by U.S. personnel. Windows Azure last week was granted a provisional authorization to operate (P-ATO) under the Federal Risk and Authorization Management Program (FedRAMP). Nadella said that Windows Azure is the first public cloud of its kind to achieve this level of government authorization.

Cloud-First Release Cadence
Monday's announcements suggested that Microsoft's new "cloud first" development approach is taking effect. Microsoft is aiming for a more rapid release cadence, with some software updates happening on a quarterly basis. When asked how Microsoft would deal with conflicts that such an accelerated cadence might cause for enterprise customers trying to keep pace with the new release schedules, Nadella was quick to promise that there would be no disruptions of its infrastructure customers' timetables.

"That's a very front-and-center question for us," Nadella said. "We are really looking [at how we] solidify the architectural layering, even on the infrastructure products that we deliver to our enterprise customers, so that, for example, we move the hosts, the guests and the workloads at different frequencies. We paid a lot of attention to this in the R2 release of Windows Server and System Center. You'll see us continue to work that issue."

Another anticipated question that Nadella dodged is speculation that he's among a number of key insiders who are candidates to replace Steve Ballmer as CEO. He did answer a question about the recent Microsoft reorganization that asked why control of enterprise servers was moved to Terry Myerson's Operating Systems group. He denied that it had been moved there and called the notion of the One Microsoft reorganization "fantastic."

"I celebrate this notion of being able to decouple what I think are our engineering efforts from our marketing and business model," Nadella said. "I think categories are going to rapidly shift. What is a developer product? What is an IT product? What is an end user product? All have to be rethought. We think about this as one unified engineering effort, and one unified go-to-market effort."

Enterprise Applications Consulting analyst Josh Greenbaum suggested that Microsoft's announcements should be seen from a broad enterprise perspective. "We're talking about systems software here," Greenbaum said, "which is only a small portion of enterprise IT. And more importantly, it's not the leading edge of innovation at all. In fact it's the rapidly commoditizing, boring low end."

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