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
— December 5, 2019

New on Cloud Academy: AWS Solution Architect Lab Challenge, Azure Hands-on Labs, Foundation Certificate in Cyber Security, and Much More

Now that Thanksgiving is over and the craziness of Black Friday has died down, it's now time for the busiest season of the year. Whether you're a last-minute shopper or you already have your shopping done, the holidays bring so much more excitement than any other time of year. Since our...

Read more
  • AWS
  • AWS solution architect
  • AZ-203
  • Azure
  • cyber security
  • FCCS
  • Foundation Certificate in Cyber Security
  • Google Cloud Platform
  • Kubernetes
Avatar
Cloud Academy Team
— December 4, 2019

Understanding Enterprise Cloud Migration

What is enterprise cloud migration? Cloud migration is about moving your data, applications, and even infrastructure from your on-premises computers or infrastructure to a virtual pool of on-demand, shared resources that offer compute, storage, and network services at scale. Why d...

Read more
  • AWS
  • Azure
  • Data Migration
Nisar Ahmad
Nisar Ahmad
— November 12, 2019

Kubernetes Services: AWS vs. Azure vs. Google Cloud

Kubernetes is a popular open-source container orchestration platform that allows us to deploy and manage multi-container applications at scale. Businesses are rapidly adopting this revolutionary technology to modernize their applications. Cloud service providers — such as Amazon Web Ser...

Read more
  • AWS
  • Azure
  • Google Cloud
  • Kubernetes
Alisha Reyes
Alisha Reyes
— November 6, 2019

New on Cloud Academy: AZ-900 Exam Update; MS-100 Exam Prep; PRINCE2 Foundation; Azure, Kubernetes, and Google Hands-on Labs; and Much More

This month, our Content Team really kicked it into overdrive with tons of new content. If you're Team Azure, then you'll be amazed at the number of Azure Courses and Hands-on Labs we published this month alone!  At any time, you can find all of our new releases by going to our Training ...

Read more
  • AZ-900
  • Azure
  • Google Cloud Platform
  • Kubernetes
  • MS-100
  • New content
  • PRINCE2
  • Product Feature
Joe Nemer
Joe Nemer
— October 30, 2019

How to Get Hands-on Experience on AWS, Azure, and GCP: Lab Challenges

Meaningful cloud skills require more than book knowledge. Hands-on experience is required to translate knowledge into real-world results. We see this time and time again in studies about how kids and adults best learn — doing the actual learning task is key. Hands-on Labs and Lab Challe...

Read more
  • AWS Labs
  • Azure
  • Google Cloud Platform
  • Hands-on Labs
Avatar
Cloud Academy Team
— October 23, 2019

Which Certifications Should I Get?

As we mentioned in an earlier post, the old AWS slogan, “Cloud is the new normal” is indeed a reality today. Really, cloud has been the new normal for a while now and getting credentials has become an increasingly effective way to quickly showcase your abilities to recruiters and compan...

Read more
  • AWS
  • Azure
  • Certifications
  • Cloud Computing
  • Google Cloud Platform
Alisha Reyes
Alisha Reyes
— October 1, 2019

New on Cloud Academy: ITIL® 4, Microsoft 365 Tenant, Jenkins, TOGAF® 9.1, and more

At Cloud Academy, we're always striving to make improvements to our training platform. Based on your feedback, we released some new features to help make it easier for you to continue studying. These new features allow you to: Remove content from “Continue Studying” section Disc...

Read more
  • AWS
  • Azure
  • Google Cloud Platform
  • ITIL® 4
  • Jenkins
  • Microsoft 365 Tenant
  • New content
  • Product Feature
  • Python programming
  • TOGAF® 9.1
Avatar
Jeremy Cook
— September 17, 2019

Cloud Migration Risks & Benefits

If you’re like most businesses, you already have at least one workload running in the cloud. However, that doesn’t mean that cloud migration is right for everyone. While cloud environments are generally scalable, reliable, and highly available, those won’t be the only considerations dri...

Read more
  • AWS
  • Azure
  • Cloud Migration
Joe Nemer
Joe Nemer
— September 6, 2019

Google Cloud Functions vs. AWS Lambda: The Fight for Serverless Cloud Domination

Serverless computing: What is it and why is it important? A quick background The general concept of serverless computing was introduced to the market by Amazon Web Services (AWS) around 2014 with the release of AWS Lambda. As we know, cloud computing has made it possible for users to ...

Read more
  • AWS
  • Azure
  • Google Cloud Platform
Alisha Reyes
Alisha Reyes
— August 30, 2019

New on Cloud Academy: CISSP, AWS, Azure, & DevOps Labs, Python for Beginners, and more…

As Hurricane Dorian intensifies, it looks like Floridians across the entire state might have to hunker down for another big one. If you've gone through a hurricane, you know that preparing for one is no joke. You'll need a survival kit with plenty of water, flashlights, batteries, and n...

Read more
  • AWS
  • Azure
  • Google Cloud Platform
  • New content
  • Product Feature
  • Python programming
Alisha Reyes
Alisha Reyes
— August 22, 2019

How to Unlock Complimentary Access to Cloud Academy

Are you looking to get trained or certified on AWS, Azure, Google Cloud Platform, DevOps, Cloud Security, Python, Java, or another technical skill? Then you'll want to mark your calendars for August 23, 2019. Starting Friday at 12:00 a.m. PDT (3:00 a.m. EDT), Cloud Academy is offering c...

Read more
  • AWS
  • Azure
  • cloud academy content
  • complimentary access
  • GCP
  • on the house
Avatar
Andrew Larkin
— August 13, 2019

Content Roadmap: AZ-500, ITIL 4, MS-100, Google Cloud Associate Engineer, and More

Last month, Cloud Academy joined forces with QA, the UK’s largest B2B skills provider, and it put us in an excellent position to solve a massive skills gap problem. As a result of this collaboration, you will see our training library grow with additions from QA’s massive catalog of 500+...

Read more
  • AWS
  • Azure
  • content roadmap
  • Google Cloud Platform