Channeling the Cloud

Can Microsoft Cloud Partners Compete with Windows Azure?

Microsoft's recent cloud moves threaten to push providers away from Redmond and toward virtualization juggernaut VMware.

The Microsoft cloud strategy has evolved to this: Compete against the likes of Amazon Web Services with a revamped Windows Azure while arming partners to build their own Windows Server 2012-based clouds that are compatible with Redmond's service.

One could draw a parallel with Microsoft's recently hatched plan to offer its own branded Surface PCs while promising hardware partners that it isn't going to compete with them. Just as the stakes are high with the Microsoft PC gambit -- OEMs could get tighter with Google -- cloud providers have options.

The key alternative is the VMware vCloud platform. The virtualization leader has signed on scores of services providers. With many hosters, systems integrators and VARs still in play, Microsoft can't afford to let too many commit to VMware.

Microsoft's answer is the combination of Windows Server 2012, which includes the new Hyper-V, and System Center 2012. At last month's Worldwide Partner Conference in Toronto, Microsoft released the community technology preview of Windows Server for Hosting Providers. The software will let partners provision and manage their own cloud services via System Center, Windows Azure Web Sites, virtual machines (VMs), the Service Management Portal and an API.

Despite VMware's lead, aligning with Microsoft has some advantages. One is Microsoft's huge installed base of customers wanting to move their Windows Server infrastructures to clouds based on the same platform. Another is Microsoft's Services Provider License Agreement (SPLA), which lets providers license the software on a usage basis while providing license mobility to customers.

And the big one is price. Going with Microsoft's cloud offering could let a hosting provider offer similar service capabilities for anywhere from half to one-third of the price of cloud providers using vCloud, says Aaron Hollobaugh, vice president of marketing at Hostway, which is running its cloud with Windows Server.

"We're still providing a highly available, redundant, secure cloud, very similar to what VMware provides," said Hollobaugh, who joined Hostway last year after working for a VMware-based hosting provider. "Because VMware's licensing costs so much more, they have to pass those charges on to their customers."

Yet Hollobaugh makes no bones about the fact that VMware currently doesn't compete with its cloud partners as Microsoft does. In June, Microsoft launched some major upgrades to Windows Azure that will let customers run VMs, effectively offering an Amazon-like infrastructure as a service.

Meanwhile, the services provider API could be a key boon to cloud partners. Presuming hosting providers and ISVs standardize on the API, it promises to have the same effect as, say, the Amazon Machine Image in creating an ecosystem. Hollobaugh is confident partners can offer higher-end services and better support than Microsoft can deliver with Windows Azure.

Nevertheless, whether Microsoft will undercut them on features and price is weighing on partners, Hollobaugh admitted. As with its PC play, it wouldn't behoove Microsoft to throw its partners under the bus.

More Columns by Jeff Schwartz:

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.

Featured

  • Microsoft Appoints Althoff as New CEO for Commercial Business

    Microsoft CEO and chairman Satya Nadella on Wednesday announced the promotion of Judson Althoff to CEO of the company's commercial business, presenting the move as a response to the dramatic industrywide shifts caused by AI.

  • Broadcom Revamps VMware Partner Program Again

    Broadcom recently announced a significant update regarding its VMware Cloud Service Provider (VCSP) program, coinciding with the release of VMware Cloud Foundation (VCF) 9.0, a key component in Broadcom’s private cloud strategy.

  • Closeup of the new Copilot keyboard key

    Microsoft Updates Copilot To Add Context-Sensitive Agents to Teams, SharePoint

    Microsoft has rolled out a new public preview for collaborative "always on" agents in Microsoft 365 Copilot, bringing enhanced, context-aware tools into Teams channels, meetings, SharePoint sites, Planner workstreams and Viva Engage communities.

  • Windows 365 Cloud Apps Now Available for Public Preview

    Microsoft announced this week that Windows 365 Cloud Apps are now available for public preview. This aims to allow IT administrators to stream individual Windows applications from the cloud, removing the need to assign Cloud PCs to every user.