Marching Orders 2016: Jump on the Azure Bandwagon
Editor's Note: Throughout the month of January, we'll be running installments of Marching Orders, our annual collection of advice and predictions from channel luminaries about what to do and what to expect in the year ahead. For today's entry, we invited Jeff Schwartz, an RCP columnist and editor in chief of RCP's sister publication Redmond magazine, to provide his insights on the most important trends in cloud.
As Microsoft's Azure cloud service turns 6 years old on Feb. 1, the company has entered 2016 gunning to overtake Amazon Web Services (AWS) for cloud supremacy. That's far from a sure thing, but it's the first time the mere suggestion of Azure closing in on AWS isn't preposterous.
Various surveys conducted last year suggest both cloud service businesses grew considerably. Thanks to Amazon's decision to break out its revenues for AWS for the first time, we got a clear picture of how robust the business has become. Based on the third quarter earnings report in October, AWS was on a run rate to conclude the year as an $8 billion business. AWS posted revenues of $2.09 billion, a 78 percent year-over-year increase.
Meanwhile, Azure sales grew 121 percent, with gross profit margins for the unit that includes Azure increasing 194 percent, even counting the company's large expenditures on building out datacenters. In a report by Goldman Sachs last month, the brokerage sized up Azure's run rate at $2.3 billion -- Microsoft has a long way to go to nip at AWS' heels. Given Microsoft's history of staying the course and looking at the ground it has already gained, the race is still on. A recent survey by multivendor cloud management provider RightScale showed the number of AWS users grew from 49 percent to 50 percent last year while Azure usage rose from 11 percent to 19 percent.
In addition to aiming to gain ground on Amazon, Microsoft also must contend with a new push from Google, which has brought on VMware co-founder Diane Greene to revitalize its enterprise cloud efforts. Besides perhaps Facebook, there are no cloud vendors that have built out infrastructure at a scale that compares to Microsoft, Google and Amazon.
For its part, Microsoft has big plans for Azure this year. A new iteration of its public cloud service, Azure Service Fabric (ASF), is set to roll out this year. In addition to letting mid- and large-sized organizations build apps that can scale massively, ASF will enable modern apps based on micro-services and containers, and provide a flexible infrastructure that will let organizations deploy an application on-premises and scale it to the Azure public cloud without making any code changes.
ASF aims to make the Microsoft cloud into the Platform as a Service (PaaS) that led to comparisons of earlier components such as Azure Service Bus and Azure Web Sites as just repurposed versions of BizTalk and IIS respectively, according Jacob Saunders, CTO of 10th Magnitude, a Microsoft Azure partner.
"Our developers are super excited about it," Saunders said, when asked about ASF during a presentation given at the New York City Enterprise Collaboration Meetup gathering last month. "There are even dedicated environments that are going to be coming out with it. The Azure app services are even going to allow you to run those dedicated on your own IaaS-like infrastructure, so even if you're not comfortable with shared infrastructure and some of the negative implications of developing for PaaS, you're going to be able to use that. I think the decision by Microsoft to roll [ASF] into both PaaS and IaaS as a foundation for thin applications that allow developers to focus on their proprietary business logic, and not encoding all that crap on the back end, is going to have a big impact. What that will look like? Time will tell once it's widely available."
Patrick McClory, an AWS expert and director of automation and DevOps at Datapipe (a partner of both providers), said Microsoft has an opportunity to position Azure as an integrated offering compared with multiple AWS toolsets such as API Gateway, Elastic Container Service (EC2), Virtual Private Cloud (VPC), DynamoDB and Relational Database Service (RDS), among others.
"What will truly be the measure of success for Microsoft is how good they are at 'keeping the lights on' with respect to the underlying components needed to support micro-services deployments -- these things could include things as base as the hypervisor, OS and possibly even container solutions such as Docker, all the way to the logging, service discovery and routing tools used to stitch [ASF] micro-services together into usable APIs," McClory said.
Today's AWS approach offers more flexibility, he noted. "I've found that all-in-one packages, in general, have less flexibility and less freedom to make fit-for-purpose types of technology decisions when performance, complexity and partitioning are critically important due to the scale of the solution," he said. "That being said, Microsoft is making a lot of strides in the right direction, and I'm planning on trying it out either way. I think that for organizations who are long-standing Microsoft customers, they're likely to give it a try and find that a solution like this meets their needs for applications that are good fits for this architecture."
Still, he's not convinced AWS will fall from its perch. "Until Microsoft is able to move beyond selling into their current client base, I think that they'll not be an enormous threat to AWS. But with the change in leadership over the last few years, I believe they have all the right things going for them in order to break that mold and get back to being an attractive option for net-new customers."
Historically, a lot of the appeal of Microsoft products for partners was high quality and market strength, in addition to Redmond's commitment to a channel approach. With Azure, it's starting to look like Microsoft is building the type of sturdy bandwagon that partners can jump on and ride.
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Posted by Jeffrey Schwartz on January 06, 2016 at 10:44 AM