Microsoft just announced Windows Azure Traffic Manager CTP (Community Technology Preview) during the keynote at MIX 11. The Traffic Manager allows the deployment of the same application to topologically dispersed data centers enabling the distribution of workload between these data centers through round robin, failover and performance based load balancing schemes.

End user traffic will go to the nearest data center based on the network proximity. The Traffic Manager  will improve the systemic qualities of the deployment by enhancing application performance, availability, reliability and scalability.

WATM is independent of the Windows Azure CDN infrastructure and is meant for cloud application service delivery while CDN infrastructure is meant for delivering content through edge nodes.

While WATM enables distributed load balanced traffic management,  the application is still responsible for reconciling the transactional state data collected at multiple data centers and replication of reference data from the single master source. Replication of the reference data and aggregation of the transactional state can be accomplished through SQL Azure Data Sync service.

-Hanu