The oncoming storm

Microsoft gets serious about the cloud

Elliot Bentley

New initiatives attempt to woo volume big spenders to Azure, and Windows Server hybridizes with cloud platform.


Microsoft yesterday
trumpeted a
series of news announcements
on the back of
its annual report to shareholders. Judging by the emphasis on
Windows Azure, it seems the Redmond giant is keen to prove its
products remain essential in a world moving to the

This “wave” of announcements is a “major
Cloud VP Satya Nadella, with an aim to
be “at the core” of a market expected to be worth more than 2
trillion dollars within the next decade.

With years of experience in the enterprise
sector, Microsoft knows that the big, reliable money comes from a
smaller number of big clients. And they don’t come much bigger than
the US government, which is being explicitly targeted with a new
“Windows Azure US Government Cloud”.

Microsoft’s answer to AWS GovCloud (which
secured a $600m contract with the CIA
), this
tailored region of Azure also adheres to specific government
regulatory and compliance regulations. However, Microsoft’s key
differentiator may be a slightly higher FedRAMP

Another source of big spenders is the enterprise
market, on which Microsoft still retains a strong hold. From the
end of the month, volume licensing customers will be offered price
discounts and extra payment flexibility for Azure. An obvious ploy
perhaps, but one which may see the company retain existing
customers eyeing up the cloud.

Next week, the company will also release a new
version of Windows Server, which takes Several cues from its forays
into cloud. This includes an “Azure Pack” which allows multiple
servers to be pooled into a PaaS-style offering (hybrid clouds,
anyone?), and will be compatible with new Remote Desktop clients
for – shockingly – iOS and Android devices.

It all comes during a phase of major transition
at Microsoft: long-serving CEO Steve Ballmer is to step down in
2014, and recently restructured the company in line with his vision
of “One Microsoft”, which will focus on providing “devices and

Though the company’s response to the biggest
computing trends of the past decade – the internet, social
networking and smartphones to name just three – has been sluggish
at best, it has embraced cloud computing with gusto. It’s even
begun hosting many of its first-party products on Azure, including
Bing, Office 365 and servers for the next-generation Xbox One games

it remains to be seen
if cloud hosting will
generate huge profits, but the low-margin strategy being adopted by
many companies in the market probably suits Microsoft just fine.
Despite the slow progress of high-profile consumer devices like its
Windows Phone and Surface lines,
revenue grew 6 percent
to $77bn from the
previous financial year, with profits also up

Photo by Microsoft

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