When it comes to Azure skies, it's all in the timing

Today at PDC 2008, Ray Ozzie, Microsoft's CTO, announced Windows Azure an operating system platform in the cloud. First, it was so nice to hear Ray talk again. I have a long history working with Lotus and Lotus Notes and it's good to see/hear him again. No matter what I always enjoy hearing his vision of computing.

But back to Windows Azure. According to the web site Windows Azure is:

Windows® Azure is a cloud services operating system that serves as the development, service hosting and service management environment for the Azure Services Platform. Windows Azure provides developers with on-demand compute and storage to host, scale, and manage Web applications on the Internet through Microsoft® data centers."

So basically it's a Windows Server in the cloud with services to support the security, hosting, deployment, and provisioning of web-based applications. The Azure Services Platform includes core services such as identity and access control, database, workflow, programming platform, and a service bus to communicate at the middle layer. All of this is built using technology that is familiar to Windows Server users. There are deliberate parallels between Windows Server and Windows Azure Services which include Live Services, .NET Services, SQL Services, SharePoint Services, and Dynamics CRM Services. I'm still trying to get the skinny on how much of these services are simply taking advantage of available solutions (e.g., SharePoint Online) and how much the core solutions have been extended to survive in a cloud platform. I'll let you know if I find out more. And of course there is much missing, such as social software (e.g., wikis, blogs, feeds), which are popular web-based applications for interfacing with external users. But that is more a criticism of Microsoft's services (i.e., SharePoint) than the Windows Server platform.

Microsoft also announced that Windows Azure will be available as a limited beta to PDC attendees with a broader beta being opened up in the near future. No announcement for general availability was made but considering how rapidly Microsoft has been building up their Software + Services strategy (introduced in June 2007) I'm suspect customers won't be waiting too long. The vision behind the move is in response to what Microsoft considers the third tier of enterprise computing, the one where the company interfaces with the world outside the corporate environment. Accordingly, tier one is personal computing (Windows or Windows Mobile) with a scale of one user, tier two is business computing (Windows Server) with a scale of the size of the company, and the third tier web computing (Windows Azure) scales to the size of the Internet. The third tier is revolutionary and it's emerging now. Microsoft, for obvious reasons, wants to build the operating system for it.

But as this post title hints, the timing of this announcement is opportune. The current state of the world economy, enterprise needs to be innovative, converging communication and collaboration platform services, along with emerging Enterprise 2.0 with it's Web 2.0 capabilities are forcing a collective step back from the full speed ahead adoption of new technology. Every day articles are published on how enterprises and SMB are tightening their belts and thinking about how to make due with what they have. Still others are looking for significant cost savings to bloated environments. Meanwhile, cloud computing solutions (e.g., Google Apps, Salesforce.com) are challenging the on-premises status quo. The value proposition that most cloud solutions offer right now is lowered cost and overhead. The Windows Azure announcement offers another value proposition - in addition to cost containment and data center freedom - to take the applications and processes that enterprises use to run their business and bring them to a broader audience in a manageable form. That is likely to take some wind out Google's (and others) sails and give customers time to consider Microsoft's offer during this bearish time.

Ultimately it will come down to cost, since the current evidence to go to cloud computing is rooted in cost savings these days. With cloud computing, SaaS, hosted solutions, insert your favorite name here, the bottom line is that the enterprise customer will get what it pays for. Microsoft said it's Windows Azure business model, like other hosted offerings, will be based on usage and service levels. So the cost will depend on what the enterprise can tolerate. Still there are likely to be cost savings when cloud services are determined the right option for an organization. Keep in mind that an educated buyer is a wise buyer. Every enterprise that considers moving vital business applications to the web should have a good reason to and will do well to build the business case first.