How Azure cloud is conquering the enterprise public cloud

Azure Cloud and Enterprise market: it is always difficult writing about one product’s strengths and “momentum” in a market of competing players. The risk of bias to one product or company is always high.

Without any specific reference to a public report, we already know that Amazon, with AWS, is currently first in the public cloud market. Amazon is the first company, the one that created the market. Financial reports confirm that Microsoft, with Azure, is the second major player in the field, with billions of dollars in revenues, but still a negative margin. Why? Microsoft is always “late” in many markets, and public cloud is one of them. At the moment, Microsoft is trying to catch up, and sacrificing profitability. Why are they making this sacrifice?

Spending on public cloud IaaS hardware and software forecast to reach $38 billion in 2016, and grow to $173 billion by 2026. SaaS and PaaS portion of cloud hardware and infrastructure software spending are projected to reach $12 billion in 2016, and grow to $55B by 2026 (Forbes). This is a good market to point and to look ahead.

Azure Cloud
Azure Cloud Enterprise public cloud market share. (Source: Forbes)

Some issues have slowed down Azure Cloud adoption in the last years

One is about reliability. Failures happen every day in a cloud data center, but the structure and organization of each facility should be resilient to them. Rarely, some failures are able to affect network trunks bigger than a “fault domain” (as a rack of computers is called inside Azure), most of the times caused by human mistake doing maintenance. Because of them, Azure Cloud had some major outages in recent years in different regions, scaring many potential customers from moving to the cloud or inviting them to move them to the Amazon cloud. Microsoft has not the same reliability numbers on Infrastructure as a Service solutions, where Amazon is already a consolidated winner. But it cannot retreat from growing and narrowing the gap.

Another issue is Microsoft’s late acknowledgment that Linux operating system is not “evil”. It is the preferred platform for Internet-born solutions. Only since Satya Nadella became Microsoft CEO and the “Microsoft Loves Linux” campaign, the Redmond-based company embraced the penguin OS and all Open Source movement, with interesting results, adoption, and services.

Empowering and extending the on-premise Cloud infrastructure

To compete with AWS, Microsoft needs to play to its strengths. The starting point for Microsoft Azure Cloud is the enterprise market, what we currently refer to the Private Cloud space. The Private Cloud is made up of companies that do not run the business on the Public Cloud. They have their business on premise, and the public cloud is a platform used to minimize capital costs and avoid obsolescence. Microsoft is a leader in running enterprise private infrastructure, and the Windows Server market is still profitable. In addition, more companies using Microsoft applications on premise are moving Windows Server on the AWS cloud.

Hybrid_Azure_Cloud
Hybrid Azure Cloud Implementation (Source: MSDN Blog)

Moving away from on-premise servers and embracing the cloud is a far more complex and long-term process for larger companies. It is a multi-year process. The enterprise market is a win for Microsoft because the hybrid cloud is the pervasive strategy in the entire Windows Server business, on an operating system it controls. Yet the new Windows Server, System Center, Active Directory, and the bestselling relational SQL Server database all allow IT pros to seamlessly manage their overall infrastructure without worrying if a server is still on-premise or in the cloud. Besides that, all services now are resilient to failure, backing up on-premise services to the corresponding cloud one.

On the SaaS side, Microsoft’s cloud offering is completed by the Office 365 online suite, a market that Microsoft shares with Google. AWS has no equivalent offering. Office 365 complements Windows hybrid strategy, starting from authenticating users with Azure Active Directory, synchronizing with on-premise authentication, and giving a Single Sign-On experience. (We should also consider that Microsoft is waging another battle on SaaS platforms against SalesForce with Dynamics.)

At this point, from the enterprise point of view, a big difference between Amazon and Microsoft is that the company was founded more than forty years ago. It wages different battles on many fronts, among on-premise infrastructures (or private cloud), offline and online productivity platforms, and the public cloud infrastructure.

Then there is another battlefield for the no-more-windows-only company: the custom software field, where developers play an important role.

The Platform-as-a-Service focus

In general, developers do not focus on developing services for the cloud, but developing services that are portable and interoperable. Portability is the need to run the service over Windows or Linux with minimum effort. On the client side, the focus is the Web, consumed via browser or on mobile devices, in an eternal fight among iOS and Android operating systems. Microsoft Windows recently “killed” its Windows-based mobile market. The company still runs on different flavors of Windows, including old Windows XP installations, successful Windows 7, and the disappointing Windows 10.

In this scenario, developers focus on two major pillars. The first pillar is the application lifecycle management. This means running all the development processes in a sort of agile methodology that allows you to develop new functionalities continuously and with quality.
The second pillar is a consequence of the first: a software solution is (or should be) made up of prebuilt functional blocks (services) that implement standard patterns .

These two pillars lead to the third major pillar of cloud computing: Platform as a Service (PaaS). To reduce costs and increase productivity, developers should focus on the problem, not the infrastructure. Cloud development should not focus on Infrastructure and Virtual Machines, but on vertical, configurable and integrable services (via standard internet REST API).
Development and developers are two major aspects where Azure performs well. Some key points:

  • The PaaS service offering is powerful, complete, and modular.
  • All services are accessible via REST APIs, with specific client libraries for all major classic C# and .NET languages, and open source languages like JavaScript, PHP and Python to invite non-Microsoft developers to bring their application on Azure.
  • Developer experience is always at its highest levels with .NET – Visual Studio experience on Windows platform , and now cross platform with .NET Core and Visual Studio Code.

PaaS is the most difficult and expensive way to approach cloud but is also the most strategic to develop a tailor-made software platform to enhance a company’s specific value points.

Internet of Things wave

There are many more scenarios, outside of the hybrid cloud, where Microsoft is playing a major role.
Another one is the Internet of Things. In the last few years, embedded technology has made a giant leap forward, enabling “things” with powerful microprocessors, pluggable sensors, and actuators that are able to connect to the Internet, generating tons of data to understand what is happening (telemetry) and receiving feedback (commanding). This has caused some big waves:

  • Big data, as all data generated from sensors, cannot be handled on premise, and so should be pre-processed by on cloud analytics to isolate meaningful data;
  • New markets that reuse devices: wearable, smart city, manufacturing, connected cars, just to cite the most famous ones;
  • Worldwide markets: Cloud allows any company to reach any country in the world with minimum latency, as data centers, regions are distributed all over the world;
  • A more mature and consistent data platform that can process, store, and visualize streaming data and data at rest, with intelligence provided by Machine Learning algoritmhs;
  • A platform to manage devices, ingest data, and integrate devices (Azure IoT Hub) over renowned standards (HTTPS, MQTT, AMQP);
  • A platform to develop devices (Windows 10 IoT Core

Internet of Things is the next “big thing” for all manufacturing companies that typically didn’t build their business online but now can create a full new set of services connecting their products to the cloud. That is why Microsoft is concentrated on long-term investments more that current profitability. In Q4 2016, Microsoft has up to 30 data center regions worldwide, with 6 more announced, more than AWS and Google combined.

Conclusions

Microsoft has changed, but not overnight. It has a lot of inertia with 100,000 employees, and many interests, products, and services in many IT fields. Microsoft was not the first in the Cloud, but now its leadership is focused on taking back its leading role in this market. Azure Cloud is growing fast, and a lot of Azure services, covering the most disparate topics and scenarios, are reaching the market in an agile way.
AWS is still the first player, but Microsoft is rapidly bridging the gap between the two major players by continuously investing in the cloud platform as well as on-premise software.
Cloud Academy will soon publish the first Azure Learning Path for Azure Cloud certification exam 70-532 and by the end of October 2016, the Learning Path for certification exam 70-534 will be officially released.

 

Avatar

Written by

Marco Parenzan

Marco Parenzan is a Research Lead for Microsoft Azure in Cloud Academy. He has been awarded three times as a Microsoft MVP on Microsoft Azure. He is a speaker in major community events in Italy about Azure and .NET development and he is a community lead for 1nn0va, an official Microsoft community in Pordenone, Italy. He has written a book on Azure in 2016. He loves IoT and retrogaming.


Related Posts

Alisha Reyes
Alisha Reyes
— July 2, 2020

New Content: AWS, Azure, Typescript, Java, Docker, 13 New Labs, and Much More

This month, our Content Team released a whopping 13 new labs in real cloud environments! If you haven't tried out our labs, you might not understand why we think that number is so impressive. Our labs are not “simulated” experiences — they are real cloud environments using accounts on A...

Read more
  • AWS
  • Azure
  • DevOps
  • Google Cloud Platform
  • Machine Learning
  • programming
Joe Nemer
Joe Nemer
— June 19, 2020

Kickstart Your Tech Training With a Free Week on Cloud Academy

Are you looking to make a jump in your technical career? Want to get trained or certified on AWS, Azure, Google Cloud Platform, DevOps, Kubernetes, Python, or another in-demand skill?Then you'll want to mark your calendar. Starting Monday, June 22 at 12:00 a.m. PDT (3:00 a.m. EDT), ...

Read more
  • AWS
  • Azure
  • cloud academy content
  • complimentary access
  • GCP
  • on the house
Joe Nemer
Joe Nemer
— June 12, 2020

Azure Certifications: Our Experts Explain Which Is Best for You

How do you choose an Azure certification? It can be hard to get started when choosing an Azure certification. There are so many to sift through, so many interesting options, and it requires a time commitment to just understand the cert landscape.To help guide you through the select...

Read more
  • AZ-900
  • Azure
  • Certifications
Alisha Reyes
Alisha Reyes
— June 11, 2020

New Content: AZ-500 and AZ-400 Updates, 3 Google Professional Exam Preps, Practical ML Learning Path, C# Programming, and More

This month, our Content Team released tons of new content and labs in real cloud environments. Not only that, but we introduced our very first highly interactive "Office Hours" webinar. This webinar, Acing the AWS Solutions Architect Associate Certification, started with a quick overvie...

Read more
  • AWS
  • Azure
  • DevOps
  • Google Cloud Platform
  • Machine Learning
  • programming
Rebecca Willis
Rebecca Willis
— June 3, 2020

Azure vs. AWS: Which Certification Provides the Brighter Future?

More and more companies are using cloud services, prompting more and more people to switch their current IT position to something cloud-related. The problem is most people only have that much time after work to learn new technologies, and there are plenty of cloud services that you can ...

Read more
  • AWS
  • Azure
  • certification
Alisha Reyes
Alisha Reyes
— June 2, 2020

Blog Digest: 5 Reasons to Get AWS Certified, OWASP Top 10, Getting Started with VPCs, Top 10 Soft Skills, and More

Thank you for being a valued member of our community! We recently sent out a short survey to understand what type of content you would like us to add to Cloud Academy, and we want to thank everyone who gave us their input. If you would like to complete the survey, it's not too late. It ...

Read more
  • AWS
  • Azure
  • blog digest
  • Certifications
  • Cloud Academy
  • OWASP
  • OWASP Top 10
  • Security
  • VPCs
Alisha Reyes
Alisha Reyes
— May 11, 2020

New Content: Alibaba, Azure Cert Prep: AI-100, AZ-104, AZ-204 & AZ-400, Amazon Athena Playground, Google Cloud Developer Challenge, and much more

This month, our Content Team released 8 new learning paths, 4 courses, 7 labs in real cloud environments, and 4 new knowledge check assessments. Not only that, but we introduced our very first course on Alibaba Cloud, and our expert instructors are working 'round the clock to create 6 n...

Read more
  • alibaba
  • AWS
  • Azure
  • gitops
  • Google Cloud Platform
  • lab playground
  • programming
Alisha Reyes
Alisha Reyes
— May 1, 2020

Introducing Our Newest Lab Environments: Lab Playgrounds

Want to train in a real cloud environment, but feel slowed down by spinning up your own deployments? When you consider security or pricing costs, it can be costly and challenging to get up to speed quickly for self-training. To solve this problem, Cloud Academy created a new suite of la...

Read more
  • AWS
  • Azure
  • Docker
  • Google Cloud Platform
  • Java
  • lab playgrounds
  • Python
Alisha Reyes
Alisha Reyes
— April 30, 2020

Blog Digest: AWS Breaking News, Azure DevOps, AWS Study Guide, 8 Ways to Prevent a Ransomware Attack, and More

  New articles by topicAWS Azure Data Science Google Cloud  Cloud Adoption Platform Updates & New Content Security Women in TechAWSBreaking News: All AWS Certification Exams Now Available Online As an Advanced AWS Technology Partner, C...

Read more
  • AWS
  • Azure
  • blog digest
  • Certifications
  • Cloud Academy
  • programming
  • Security
Alisha Reyes
Alisha Reyes
— April 9, 2020

New on Cloud Academy: AWS Solutions Architect Exam Prep, Azure Courses, GCP Engineer Exam Prep, Programming, and More

Free content on Cloud Academy More and more customers are relying on our technology and content to keep upskilling their people in these months, and we are doing our best to keep supporting them. While the world fights the COVID-19 pandemic, we wanted to make a small contribution to he...

Read more
  • AWS
  • Azure
  • Google Cloud Platform
  • programming
Avatar
Logan Rakai
— April 7, 2020

How to Effectively Use Azure DevOps

Azure DevOps is a suite of services that collaborate on software development following DevOps principles. The services in Azure DevOps are:Azure Repos for hosting Git repositories for source control of your code Azure Boards for planning and tracking your work using proven agil...

Read more
  • Azure
  • DevOps
Alisha Reyes
Alisha Reyes
— March 17, 2020

Cloud Academy’s Blog Digest: How Do AWS Certifications Increase Your Employability, How to Become a Microsoft Certified Azure Data Engineer, and more

With everything going on right now, it's likely that the only thing you've been reading lately is related to the coronavirus pandemic. It's important to stay informed during these times, but it's also good to jump into something that can take your mind off of the current situation for j...

Read more
  • AWS
  • Azure
  • blog digest
  • Certifications
  • Cloud Academy
  • programming
  • Security