Dan ScarfeBy Dan Scarfe, Dot Net Solutions

Recently Gartner released their magic quadrant for Cloud Infrastructure as a Service Providers: http://www.gartner.com/technology/reprints.do?id=1-1IMDMZ8&ct=130819&st=sb.

It was fantastic to see Windows Azure placed in the visionary quadrant, outlining the breadth and depths of the platform and its completeness in Gartner’s eyes. We’re seeing the IaaS offering, built on over 5 years’ innovation on the core platform, getting huge amounts of interest from our customers.

Disclaimer: Dot Net Solutions is one of Microsoft’s leading Cloud specialists. I’ve been around Windows Azure since its inception - I’ve lived and breathed it for 5 years. Our business is built on it, but that’s a choice we made because we really like it. A lot.

When reading any magic quadrant report, everyone immediately looks at the picture, what’s far more interesting is to read the commentary.

Leader, Amazon Web Services, is praised for its sheer scale and being extraordinarily innovative, exceptionally agile and very responsive to the market. The cautionary note points out that though Amazon is apparently the price leader (Microsoft has publically stated to price match Amazon), it charges separately for optional items that are often bundled with competitive offerings. These include things such Load Balancers and free connectivity within an entire region, which are available free of charge with Azure. More cautionary is the note about Amazon having multiple generations of compute instance "families" — such as the m1, m2, and m3 families. A recent independent report on Cloud performance showed Azure running Linux VMs three times faster than AWS.

Windows Azure was also praised:

“Microsoft has a vision of infrastructure and platform services that are not only leading stand-alone offerings, but also seamlessly extend and interoperate with on-premises Microsoft infrastructure (rooted in Hyper-V, Windows Server, Active Directory and System Center) and applications, as well as Microsoft's SaaS offerings. Its vision is global, and it is aggressively expanding into multiple international markets.”

This hybrid approach to service delivery is a key part of Microsoft’s vision. Microsoft’s large on-premises installed base perceive Windows Azure as an easy on ramp to public Cloud. UI – a key part of Microsoft’s historic success also shows up in Azure:

“Microsoft has built an attractive and easy-to-use UI that will appeal to Windows administrators and developers. The IaaS and PaaS components within Windows Azure feel and operate like part of a unified whole, and Microsoft is making an effort to integrate them with Visual Studio and System Center.”

One of the other key value-adds with Azure is the range of additional services which are available, often without cost. These includes Windows Azure Active Directory (free up to 500k users), Mobile Services (free up to 10 services), Web Sites (free up to 10 sites). Paid for services such as Media and BizTalk also offer great additional functionality.

On the cautionary side:

“Windows Azure Infrastructure Services are brand-new and consequently lack an operational track record. The feature set is limited and the missing features are ones that are critical to most enterprises. Although Microsoft has a generally good uptime record with Azure PaaS components, it will be challenged to scale its IaaS business rapidly.”

The other criticism was a lack of Linux distributions and language support beyond .NET. This really isn’t the case and Windows Azure actually supports a broad range of languages for its PaaS model and the only major distribution omission is RedHat, which hopefully will be available soon.

The other part of the report I don’t agree with is Microsoft’s score for ability to execute. Two of the ‘high’ rated measures were Viability and Track Record.

Viability describes the:

“success of their cloud IaaS business, as demonstrated by current revenue and revenue growth since the launch of their service; their financial wherewithal to continue investing in the business and to execute successfully on their road maps; and their organizational commitment to this business, and its importance to the company's overall strategy.”

Windows Azure is already a $1bn business. Storage and compute (and associated revenues) are doubling every six months. Cash shouldn’t be a problem with a $77 billion cash mountain which will be burning a hole in the pocket of Ballmer’s replacement. Azure has been the shining light in all of the recent press around Microsoft.

Track Record describes a market that is:

“evolving extremely quickly and the rate of technological innovation is very high. Providers were evaluated on how well they have historically been able to respond to changing buyer needs and technology developments, rapidly iterate their service offerings, and deliver promised enhancements and services by the expected time.”

Microsoft is a completely different business to the one in 2011, or even 2012. It’s been breath-taking to watch. “We’re all in” has now become “Cloud first”. Every major new Microsoft product will be Cloud first. The release cycle for new products has shifted from 3 years to one year. For Azure itself, it’s every 3 months.

One of the other values was sales execution and pricing which is an:

“ability to address the range of buyers for IaaS, including developers and business managers, as well as IT operations organizations; adapt to "frictionless selling" with online sales, immediate trials and proofs of concept; provide consultative sales and solutions engineering; be highly responsive to prospective customers; and offer value for money. This criterion is important to buyers who value a smooth sales experience, the right solution proposals and competitive prices.”

This is the crucial piece. With organisations streamlining procurement and reducing the number of suppliers, a provider able to sell Cloud effectively as an extension of a pre-existing commercial agreement is very powerful.

“Microsoft's brand, existing customer relationships and history of running global-class consumer Internet properties have made prospective customers and partners confident that it will emerge as a market leader in cloud IaaS. The number of Azure VMs is growing very rapidly. Microsoft customers who sign a contract can receive their enterprise discount on the service, making it highly cost-competitive. Microsoft is also extending special pricing to Microsoft Developer Network (MSDN) subscribers.”

Having an effective partner network able to scale and deal with demand is crucial and is something that AWS lacks:

“AWS has field sales, solutions engineering and professional services organizations, but the rapid growth of AWS's business means that sales capacity is insufficient to consistently satisfy prospective customers who need consultative sales.”

Microsoft has an extensive account management structure and over 40,000 partners in the UK able to sell Azure. That’s a lot of bodies.

Azure still needs to do a bit of catching up from a functionality perspective according to the study, but we need to bear in mind the actual date of the study was only 13 days after Windows Azure IaaS went live. Since then there have been a number of major new releases. However, right now on August 28th 2013 there are some features that aren’t available on Azure that do exist on AWS. Azure is missing direct connections between its datacentres and customers’. Azure is missing long-term offline storage and hard drive uploads. Oracle is only available as a VM, not as a service.

But that’s the case today and not necessarily next week or next month. The speed of innovation on Azure is staggering right now.

The other potential players are split in two:

  • VMWare customers such as Savvis, Terremark and CSC. Terremark just announced a furthering of their strategic partnership with VMWare. These vendors will struggle to differentiate themselves from each other. VMWare’s hybrid story is all about ease of portability between customers’ private Cloud and its public Clouds, but this also means to any VMWare hybrid partner. The report also points out that whilst it is:

    ”straightforward to move VM images from one cloud to another, truly hybrid multicloud scenarios are rare.”

  • OpenStack providers including RackSpace and HP. The problem with OpenStack partners, in the same way as VMWare customers, is differentiation. As soon as “partners” seek to differentiate themselves by building protected IP on an open platform the community starts to break down. The same can be seen on Android, where Amazon run a private branch and Google effectively owns the public branch. Also the report points out the fact that

    “an ecosystem is "open" has nothing to do with actual portability.”

For everyone else

“The gap between the market share leader and the rest of the market is widening. Many providers have solid offerings that encompass the most fundamental capability in this market — the ability to provision VMs rapidly on-demand, coupled with storage and an Internet connection. But most are finding it challenging to move beyond this point. Customer expectations are increasing, use cases are broadening, and many providers have neither the ambition nor the resources to compete across the full breadth of the addressable market.”

The report highlights that, today, steady load on machines can be cheaper on premises. But it’s only cheaper if you have existing investments and existing staff. A huge part of the cost of each IaaS instance is the cost of running, housing and looking after the box. That’s why Cloud has been so popular with start-ups. But start-ups are being born each day inside existing companies, and if those start-ups and joint ventures are adequately shielded from legacy, retained costs, Cloud can provide significant commercial advantages. It can also provide a clear cost breakdown and removes the IT “black hole” line item. Sometimes though, time is money, and getting out of the blocks early can be worth a premium, even if you bring it back on-premises in the future.

Cloud IaaS is still, very much, in its infancy. New terms and new concepts are still be invented. One of the most interesting parts of the report was a new phrase – “Cloud Enabled Systems Infrastructure”. This phrase could be seminal as it describes a model of Cloud consumption which is truly friction free. For widespread adoption of Cloud amongst enterprises to happen, it has to be easy. Really easy. Only now are we starting to see a generation of Cloud platforms, be they VMWare or Hyper-V based (although interestingly not AWS) where public Cloud becomes an extension of your internal private Cloud or legacy infrastructure. When moving an application between your datacentre and a service provider’s is as easy as ordering something through the Amazon Mobile app, then it will hit critical mass. And today as an industry we are almost there.

The next two years are going to be incredibly fun to watch pan out. I think it will turn into a two horse race between AWS and Azure and I’m delighted to have a front seat.

Find out more about Windows Azure www.windowsazure.com

Find out more about Dot Net Solutions www.dotnetsolutions.co.uk