In-Depth

Hey You, Get onto My Cloud

The preview release of the Windows Azure Services Platform kicks off Microsoft's cloud-computing era, which promises to dramatically change the computing strategies of IT shops.

• By Kathleen Richards and Ed Scannell
• 01/01/2009

The surprises didn't stop there. Ozzie also unveiled the Azure Services Platform for developers, which can be used to extend local apps with services as well as build Windows cloud-based systems.

The first public preview of the platform as a service, made available to PDC attendees, consists of .NET Services, SQL Services and Live Services for access control, service bus integration, federated identity, data storage and synchronization with devices and Microsoft's Live family of applications. These tools and services can be used "a la carte," according to Microsoft, for building and testing services-enabled applications designed to scale up or out as needed on developers' desktops in Visual Studio 2008.

If the winds of sweeping change hadn't sunk in with the 8,000-plus Windows and .NET developers in attendance, the peek at Office 14 and Microsoft's plans for Web-based versions of Word, Excel and PowerPoint applications made it clear that the Software plus Services era had landed in Redmond.

After its failed bid to take over Yahoo! Inc., Microsoft -- no quitter -- was left with just its own organically grown products and services to face off against its Internet nemesis, Google Inc., which launched its cloud stack, Google Apps Engine, in April. Microsoft would also have to fight the cloud computing war on a second front against Amazon.com Inc., the online retailer that successfully expanded into hosted Web services in 2006.

Just Getting Started
"This is one of those markets where I don't feel like we're late to market at all," says Bob Muglia, senior vice president, Microsoft Server and Tools Business. "The market has clearly not moved to these cloud-based services, and we still sell more Windows servers every day than people wind up using in all these cloud-based services put together in a year."

Bob Muglia, senior vice president of Microsoft's Server and Tools Business, is charged with melding Azure with Microsoft's infrastructure products.

While the on-premises market clearly pays the bills at Microsoft, the new Azure Services Platform represents a transformation of the company's strategy that will likely affect every product line -- in short order. "We definitely expect the major services to come online in 2009, and certainly by 2010 we will be seeing all of these things become production quality," Muglia says.

A nascent market, promises of lower costs, Internet engineering efficiencies and much greater agility -- opportunities to scale cloud-based apps up or out as needed without worrying about implementing or managing infrastructure -- are all piquing companies' interest in cloud computing. The money IT shops can save on on-premises hardware, software deployment, patching, maintaining and updating could serve to accelerate some firms' push toward a cloud-computing strategy.

"I think the current economic situation could actually speed IT shops' move toward some of the Azure services because, in general, the benefit of these services is you're saving a lot of up-front costs," says Matt Rosoff, lead analyst, online services strategy for Directions on Microsoft.

The hot-button issues for many organizations that still need to be resolved for IT to even consider cloud computing are security, high availability and the business and legal implications of offsite data storage. Many companies would prefer to run their own internal clouds, but that misses the point of the Internet engineering efficiencies offered by massively scaled applications.

"Most companies are just not ready to give up control of mission-critical applications like ERP to the cloud," says Sharon Ward, ERP solutions strategy director at Green Beacon Solutions LLC, who heads her company's Dynamics AX business. "They're still experimenting with CRM, but when it comes to entrusting a company's sensitive financial information, it's not something they're comfortable with.

"And the thought of not being able to process shipping transactions or generate invoices because of a problem beyond their own control gives most executives the shivers," she says. "As more and more companies begin to experience success with SaaS [Software as a Service], we'll see them begin to entrust even ERP to their outsourcers, but there's very little demand as of yet."

Rafael Laguna, CEO of Open Exchange Inc., a vendor of e-mail and collaboration applications, says he has no doubts that cloud platforms and services-based applications will transform the industry. "Cloud computing will change the way we use computers and the Internet, much in the way open source software did and Microsoft did back in the 1980s. It's a significant development," he says.

While he admits to a bias toward open source, Laguna says he doesn't like what he sees so far from Microsoft's Windows Azure and its accompanying services. Redmond's offerings are too Windows-focused and will not gain broad appeal until the company takes a more open approach, he explains, adding that Microsoft's programming model is too tied to the aging client-server model and not linked enough to the Internet model.

"The best approach we've seen so far is Amazon's because a lot of their cloud technologies and services are based on open source components, but they allow you to use all the tools you're familiar with to build Internet-based apps," Laguna says.

Amazon.com describes its Electric Compute Cloud (EC2) -- which became available in October, just four days before Microsoft's Windows Azure launch -- as loosely coupled and "platform-agnostic." EC2 supports the leading Linux distributions from Red Hat Inc., Canonical's Ubuntu, Sun Microsystems's OpenSolaris and -- in another surprise days before at PDC -- Windows Server 2003 (in beta). Users can host their apps on Web servers, Apache HTTP or IIS/ASP.NET, use Java App Server, JBOSS Enterprise App Platform or Ruby on Rails development environments. They can also store data in a variety of RDBMSes, including Oracle 11g, Microsoft SQL Server Standard 2005, Microsoft SQL Server Express or MySQL Enterprise. The company also offers its own

SimpleDB database and Simple Storage Service in the cloud.

Yet Microsoft's installed base of enterprise accounts, which have bought billions of dollars of desktop and infrastructure products, may work in the company's favor, Rosoff says. "If you're an IT buyer, you're going to trust the enterprise software vendor you're already working with over a company whose online business is being an online retailer, or, in the case of Google, a company whose business is selling ads," he says.

Owning the Cloud
Windows Azure -- a word for that shade of blue many associate with the sky -- is Microsoft's operating system for what Ozzie calls "an entirely new tier of computing ... catalyzed by a trend toward the externalization of IT."

Developers can build cloud apps on their local desktops using the Azure APIs and services with Visual Studio ASP.NET Web and Cloud Service project templates. They can test their applications offline in a cloud simulation environment enabled by the Windows Azure SDK.

When the app is ready for deployment, developers select a "publish" option to package the app -- code, prescriptive architecture and configuration settings -- and access the Windows Azure Development Portal. "Our goal with Azure and Visual Studio is to take and infuse an application model into something that the average developer can build," Muglia notes.

Microsoft then runs the service for a fee on its Windows Azure platform hardware infrastructure, which provides "automated service management."

"Windows Azure is our lowest-level foundation for building and deploying a high-scale service," Ozzie said at PDC, "providing core capabilities such as virtualized computation; scalable storage in the form of blobs, tables and streams; and perhaps most importantly, an automated services-management system -- a fabric controller that handles provisioning, geo-distribution and the entire lifecycle of a cloud-based service."

How will the role of traditional IT change in an Azure-services scenario? Merely outsourcing Windows Server or SQL Server in the cloud doesn't fundamentally change the cost of your operations, asserts Muglia. Services platforms are architected so that they don't need human intervention to keep running. "If you re-engineer the software so that it's self-maintaining, then those costs can be dramatically reduced and we can save IT a boatload of money. This is really what this is about in the long run," Muglia says.

Microsoft's architectural approach to Windows Azure is also markedly different than the one taken in building the server and desktop versions of Windows. Azure is purposely more streamlined, with a smaller code base and much faster, says Al Gillen, VP of system software for analyst firm IDC.

"When Microsoft builds an OS, they think about the millions of combinations of hardware devices and software they must support," he says. "But with the Azure Services Platform, they said, 'We have these two or three storage platforms, period; the hypervisor will have this set of attributes, end of discussion.'"

Application by Application
It's also important to understand what Microsoft is not doing with Azure, asserts Gillen. "They are not offering a general-purpose Windows cloud where once you're done managing Windows servers, you can take all your apps and data and put them on an Azure Services Platform," he explains. "There really isn't an ability to do a direct migration from your in-house environment out to this services platform."

But what corporate and third-party developers can do is merge the Azure Services Platform together with applications being built internally, he says.

Gillen doesn't expect many apologies coming from Microsoft about not supporting open source, or even some open standards at this point in Azure's dev cycle. The first community technology preview of the platform supports .NET-managed code only. At PDC, Microsoft announced its plans to support native code, Ruby, Python, PHP and the Eclipse development environment.

For now, Microsoft is pursuing the right strategy, Gillen says, by giving its large base of loyal ISVs an environment they can consume and use almost immediately.

"For an average IT shop with Visual Studio skills, to consume the Azure Services Platform is actually not rocket science for them," Gillen says. "It's smart on Microsoft's part to make it easy for this huge group of [Visual Studio] developers and turn them into developers that can write for the Web tomorrow."

Use Cases
Building a Web service is one thing; deciding when and how to use Web services to support a growing population of desktop and mobile device users may present the larger challenge.

"The reality is a Web services platform like Azure is as broad in its target as Windows or Windows server is, so it really ultimately targets everybody," Muglia says. "The kind of questions you have to ask in some sense is, 'Where are you targeting first?' We really are going after a couple of major audiences in the early days."

Early adopters targeted by Microsoft include Web start-ups, hobbyists who can get something up and running quickly and enterprises with unique business problems, such as those that need to connect with a variety of suppliers and customers. Azure technologies such as the "Internet" services bus and federated identity technologies (code-named "Geneva") planned for .NET Services can be adapted to address these types of issues, Muglia says.

Microsoft's pricing model will also be a deciding factor for many developers and IT shops, says Rockford Lhotka, principal technology evangelist for Magenic Technologies Inc., a Microsoft Gold Certified Partner. "My primary thought is: I'll get more excited about Azure once they give us some inkling of the pricing -- does it apply to me and my employer, or only to my biggest customers?" Lhotka says. "That's going to temper how enthusiastic I am. Why learn it if I never get to use it?"

Muglia says customers will have three pricing models. Some of the services, such as Live ID, will be advertising-funded. Others will use a per-user charge similar to the SharePoint and CRM model. The third pricing model will be utility-based or subscription-oriented, with per-usage fees for some services. "The specifics of that we're still working through, and we'll announce those sometime next year," Muglia says.

Reduced IT Costs Will Be Azure's Long-Term Benefit A Q&A with Microsoft's Bob Muglia

As Senior Vice President overseeing Microsoft's multi-billion dollar Server and Tools Business, Bob Muglia figures to play a central role in establishing the company as a meaningful player in the cloud-computing arena. It will be Muglia's job to ensure that Windows Azure -- and its attendant Platform Services -- work and play well with Microsoft's core infrastructure products. Those products include Windows Server, SQL Server, Visual Studio, virtualization products, System Center management products and Forefront security products, among others. Muglia sat down with Redmond Editor Ed Scannell and Redmond Developer News Senior Editor Kathleen Richards to discuss Microsoft's cloud-computing strategy. Redmond: The general perception is that Microsoft is lagging behind some competitors in delivering a cloud strategy. What can you do to fast-track the adoption of Windows Azure among developers? Muglia: First, the idea we're behind is an amazing concept given how early everything is. The market has clearly not moved to these cloud-based services. The market is still very much an on-premises market, but we will move very quickly with Windows Azure. Because it's a services platform, it enables us to bring things out on a more regular release cycle than when we have to work with our customers to get them to install and deploy something. Developers using Azure are optimistic about it, but they have questions about the target audience. Who do you see adopting it first? The reality is a Web services platform like Azure is as broad in its target as Windows or Windows Server is. It ultimately targets everybody. But we'll focus on a couple of audiences initially. We're definitely going after Web start-ups and hobbyist sorts of developers -- those people that think they can put something together quickly, get it running and see what the product can do. We're also going after some people who need to solve very substantive problems that major businesses have today, particularly those working with a wide variety of different suppliers or customers, and that need to connect across to multiple organizations. Is there overlap with Azure's Platform Services and your existing service-oriented architecture (SOA) initiative? Well, there's a lot of consistency between the two is the way I would put it. At PDC, I talked about services platforms being the fifth-generation application platform. The first was the monolithic application platform, then client-server, Web, Web services or SOA, and then [cloud] services. What we see is a lot of evolution between the SOA platform and services platform. So Azure, in the context of the SOA applications people have built, as they modify them to take advantage of the scale-out characteristics of Azure they can reuse a great deal of the work they've done. How do you see the role of IT departments changing as they increasingly adopt cloud computing? The biggest characteristic that the services platform movement will have [in IT departments] is the reduction in people and time spent to maintain IT applications. The vast majority of IT dollars don't go into capital, don't go into software purchases, don't even go into software development. The vast majority of IT dollars get spent running their operations. The reason services platforms are different is [that] they're architected to not need that sort of human intervention to keep them running. You can outsource those costs to India for now and save a few bucks, but you won't save that much in the long run because costs worldwide are equalizing to some extent. Will it be mandatory that IT shops house Azure in Microsoft data centers? We're hosting them in Microsoft data centers, but also we will take some of the concepts we're building in Windows Azure and build them back into Windows Server and our packaged products. So, the same benefits begin to accrue to IT as they run their businesses inside their own data centers or our partners' data centers. The same concepts that Azure will bring to the way applications are built and the services orientation to writing applications will exist in Windows Server, SQL Server, System Center and all of our products over time. A criticism of Azure is that Microsoft's approach is too Windows-centric. First, remember Windows is the most broadly used platform on the planet, and we can run a wide variety of different applications and application-programming models. We've talked about support for PHP and a whole set of different environments in the Azure platform. So I think we will be very open. VMware claims it can accommodate many workloads and environments. Some analysts say they have a more flexible approach than Microsoft. Clearly I don't agree. The products we ship today -- whether it's Hyper-V or System Center -- support Linux and a wide variety of different environments. We have a great deal of heterogeneous support in our existing products. In fact, we manage VMware; they don't manage Hyper-V. Our approach to heterogeneity has been quite open and broad in ways that VMware hasn't been willing to embrace. The other point that's important to emphasize is [that] you can't solve the problems relating to reducing the cost of ownership and the labor that goes into an IT operation with just the virtualization layer. VMware has a hammer, and so everything looks like a nail. Those technologies are implemented at the application layer, and VMware has no assets in that space. Is the challenge for developers going to be how to build services, or is it more about what services to build? Everything will have to mature from a software and services perspective, and from the perspective of a developer understanding how to build these applications. There are only several instantiations of scale-out services applications on the planet that can reduce the cost of operations in these massive applications. The problem is [that] the talent to build them is very limited. Our goal with Azure and Visual Studio together is to infuse an application model with something the average developer can use to build exploitive applications. How can developers use Windows Azure to extend the online versions of products such as SharePoint, CRM and Exchange? The question is: How will Microsoft extend our existing applications by building them into the Azure framework and enable them to be used? We can open up the developer experience and make it easier for them to write Web parts to extend the hosted version of SharePoint, for instance, and connect it back to their online business systems they have on premises. A perfect example is where companies can sign up for SharePoint-based portals in the cloud and our ability to provide the full dev environment. Although without Azure, our ability to do so is somewhat limited. Will the SharePoint Services and Dynamics CRM Services that were announced at PDC be part of the Azure Services Platform? Think of those as extensions of the platform. SharePoint is a great example of this, where it's both an end-user-based application and it's part of the underlying application platform. Likewise for CRM. As you work on customer relationship management and you want to expose your business processes associated with that, that application does that. You can think of the Azure platform as providing a set of services that customers can use as they use hosted versions of CRM and SharePoint, and potentially for on-premises versions of those products, even integrating them together. They're user-facing parts of the platform that have an important connection back into business services. Has the community technology preview been opened to a broader audience since PDC? It has, and we will keep opening it up more broadly. Different services, by the way, will be opening up at different speeds. For example, we're opening up our identity services, the database services, the workflow services a bit faster than we're opening up our compute-based services, although those, too, are opening up quickly. You have a range of different competitors for Azure, most notably Amazon. Some observers are impressed with what the online retailer has done. We have to give Amazon credit. [Amazon's founder, Chairman and CEO] Jeff Bezos' team has done a very good job of pioneering many aspects of these services. They have some assets that they've built for their commerce-based applications they use internally. I view Amazon as a company we compete with but who we very much treat as a customer. We also see opportunities to partner with them. Their model is different than many others, but my view is there are many hosting partners that we enable with Windows, and Amazon is a great partner in that context. People are very curious about what pricing model Microsoft will use. You'll see three pricing models. Some services will be free [and] advertising funded. You will see a utility-based or subscription-oriented pricing model attached to per-usage fees for some services. The specifics of that we're still working through, and we'll announce those sometime next year. You'll also see per-user charges for some services that are more user-focused, like you see with SharePoint and CRM. Those have a monthly user fee attached to them. The ones you'll see us filling in over time are the detailed usage-based or utility-based services. Chances are that's the way we'll do Windows Azure and our database services. The specifics will be announced next year. -E.S. and K.R.

Get off of My Cloud
In addition to questions about pricing, Microsoft's platform hosting model -- which demands that users run Windows Azure services out of Redmond's mammoth data centers -- may do little to entice corporate IT shops to try out Windows Azure. And it may further alienate its Web hosting partners.

Microsoft started competing with its Web hosting partners earlier this year, and it has already had a damaging impact on sales of Microsoft's products, Laguna notes, particularly its Exchange online franchise.

"They sold maybe 1.5 million accounts worldwide the past couple of years. That's nothing. When you think there are 1.6 billion hosted e-mail accounts out there and 450 million on-premises Exchange accounts, 1.5 million is a very poor performance," Laguna says.

However, other industry observers say that Microsoft will eventually give its traditional Web hosting partners a piece of the Azure action. "When the Azure Services Platform matures to a certain level, will Microsoft sell subscriptions to hosting partners? I don't think they'll have any choice. Once it reaches a certain level of maturity, the partners can support it themselves," IDC's Gillen says.

Microsoft sees Google as its primary competitor, and views Amazon as a competitor, customer and potential partner. "[Amazon.com is] now hosting Windows, and we're thrilled about that and I want to work with them to broaden their usage of Windows as much as possible," Muglia says.

In the Middle
"One of the problems with the cloud strategy being put forward by Amazon, Google, Microsoft and others is that they likely will be incompatible. It will be the whole California motel approach to the cloud again," says Paul Maritz, president and CEO of VMware Inc. "Our whole strategy actually is to not own the cloud going forward, but instead to enable interoperation between clouds and between corporations' internal infrastructures in the cloud."

VMware's secret sauce for getting internal and external clouds to interact smoothly centers on its vApp technology, something it has also applied to its virtualization products.

"Virtualization by itself can't solve every problem," Muglia says. "It's an incredibly important foundational technology. And of course we use virtualization [Hyper-V] as a part of Azure, but it isn't sufficient because the issues associated with the costs of running an application are actually implemented at the application layer. VMware has no assets in that space, so they can't even talk about the kinds of foundational changes that I'm building for IT. They can't even talk about that."

An issue that puts Google at somewhat of a competitive disadvantage, Laguna believes, is that the company's business model so far has depended, in part, on owning its clients' data. Google's App Engine is less flexible than Amazon's platform in that it requires a stack similar to the one used by the search powerhouse -- Python app servers, Bigtable data storage and the Google File System.

"Right now, we're looking at VMware and Amazon because they're open enough for our stuff to work well with theirs, so we're not depending on Microsoft or Google. The open version will prevail, and that isn't where Microsoft is right now," Laguna says.

Gillen, too, says he likes the approach VMware is taking with its cloud strategy because it will likely be less disruptive to IT shops by giving them a clear path from their existing infrastructure to the cloud.

"Microsoft is going at this from a different point of view [than VMware], where they're looking at next-generation applications to be built off their cloud as opposed to taking apps and just hosting them in the cloud. Frankly, though, customers will need both," Gillen says.