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We are seeing it from all sides now. From the usual suspects in OEM to HCI to virtualization to public cloud, everyone is out to address the growing demand to shift legacy IT workloads to agile, cloud native, consumption-based, hybrid-friendly, modernized IT environments. A mouthful perhaps, but that doesn’t make it any less true. We have entered a multi-cloud world, and the competition is going to be abundant.
The question that’s top of mind for many is which company or companies will emerge as the market leader. This week at Ignite, Microsoft’s annual customer conference, the company made a number of announcements around its Azure Cloud. Based on those announcements and the company’s existing platform of services, I wanted to break down how I see Microsoft’s Azure strategy evolving and share what business and IT leaders need to be thinking about when they are looking at modernizing their IT to support the growing multi-cloud initiative.
A Quick History Before Looking Forward
The past few months have served Microsoft and Azure well. With a massive win coming to Microsoft with the award of the DOD’s JEDI contract, the company suddenly has the look and feel of a company ready to go toe to toe with AWS.
However, this perception of parity is still more perception than reality. As of last year, Microsoft had about 15.5% of market share, while AWS held close to 48%. Nevertheless, Microsoft has been the first company to successfully bite into AWS’s market share, leading some analysts to believe Microsoft could be well-positioned to take additional share in the coming year. Time will tell on this one, but it wouldn’t be a surprise if it happened.
Perhaps the most noteworthy item in Azure’s history is that it has experienced a meteoric rise. While it has continuously been delivering on its promise to IT, developers, and business units with enhancements in areas like hybrid (Azure Stack), AI (Azure ML Services) and business productivity via low code/no code (Power Platform), along with greater customer insights (D365), Microsoft has really just reached a tipping point. It has become increasingly clear that the company sees itself as ready to compete for the top spot in cloud.
It will be with great interest that I watch re:Invent to see what AWS has to say in response to all of Microsoft’s success with Azure in recent months.
How Azure is Addressing the Enterprise Need
At this year’s Ignite event, the company launched new data-centric solutions for Azure and across its cloud solutions portfolio to address the growing demand across the enterprise for multi-cloud but also to handle the challenges of data proliferation, demand for edge computing, the continued need and use of virtualized environments and, finally, the hybrid/multi infrastructure management conundrum.
Let’s dive into these four areas and how I see them being addressed within the growing Azure portfolio.
Microsoft is addressing the rapid proliferation of data and the growing complexity of masses of data stored across multiple locations with the announcement of Azure Synapse. Synapse appears to be the next evolution of Azure SQL Data Warehouse, delivering greater performance and capabilities than earlier iterations. Azure Synapse also claims an ability to handle the largest queries (limitless scale) and support low code/no code integration and management, all within a unified, secured workspace.
Obviously, the promise of Azure Synapse is encouraging. The company continues to focus on simplifying complexity and making data science less intimidating at scale, while also addressing the powerful requirements to handle complex models at scale.
Growing Demand for Edge Computing
We are all hearing a lot about the growth of edge computing, but IaaS at the edge is still a developing topic that I expect all the OEMs and cloud providers to address. Microsoft’s announcement of Azure Stack Edge, a cloud-managed device offered on an HaaS (Hardware as a Service) basis, makes sense. The interesting approach that Microsoft is taking with Azure Stack Edge is that its nodes come reinforced for AI. In fact, each node has network data transfer capabilities, incorporates a built-in FPGA for accelerated AI-inferencing, and functions as a storage gateway.
Built in two flavors, it features one for rugged environments and one for commercial, with both FPGA and GPU versions to empower AI inference at the edge. The offering also has automatic failover and is built to be run on VMs or containers. With edge being a critical part of the modern IT infrastructure, this offering immediately enhances the capabilities and competitiveness of Azure for industrial and enterprise applications.
Staying Open to Legacy Architecture
Change doesn’t happen overnight, and Microsoft clearly realizes this (more on this later). Essentially, virtual machines are not going anywhere anytime soon, and Microsoft seems focused on enabling customers that are invested in VMs to continue to utilize investments while modernizing their architecture. The newest update is Azure Generation 2 virtual machines, which enable larger workloads to run in VMs in Azure through support for larger memory, larger VMs (up to 12 terabytes), and provisioning of OS Disk sizes that exceed 2TB.
This is a smart move by Microsoft, addressing the continued demand and enterprise utilization of virtual machines and clearly a nod to the fact that addressing this was important.
Microsoft also deepened its hybrid cloud solution known as Azure Stack Hub with Azure Stack Hub Services, which will enable cloud database management, backup, real-time data ingestion, real-time stream processing, virtual desktops, and Kubernetes. This is clearly an attempt to rival AWS Outposts, which is ahead of Azure at this point, but this launch will help the company compete more directly with what AWS announced at last year’s re:Invent.
Playing the Long Game for Multi-cloud
This leads us back to where I started. Multi-cloud is one of the most important and complex challenges of today’s ITDM. Just about every tech company seems to have an offering, but in the end, the winner will be the company or companies that are able to address the reality that most enterprises will have certain workloads on-prem and others in the cloud, and not necessarily in the same cloud.
Microsoft announced Azure Arc to be able to support cloud out to the edge for Azure Services. The enhanced value proposition here is that it’s flexible regardless of what cloud workloads are placed there because of its support of container architectures, most notably Kubernetes. While this new application is still in preview, it is set to deal with Kubernetes, Azure SQL analytics, unified management, governance, compliance, security, auditing, and control (Read: Full Control Plane). I believe this is a game-changer for Microsoft, as it propels the company to the front of the line among the multi-cloud offerings in market. A bold move, but not surprising given Microsoft’s current multi-cloud ambitions.
Partnership and Cooperative Competition
Microsoft sits in a unique place in the market as the company competes and collaborates in almost every business unit from devices like Surface, where it competes, but also cooperates with most device makers. This is also true in infrastructure from edge to core, software (both development and SaaS), and new announcements like Power Automation and interoperability with Webex Teams showed that the company will enter spaces where it sees a gap to fill, even when it has sound partnerships (Automation Anywhere and UiPath) or end-to-end solutions in place (Microsoft Teams).
I believe this is fundamental to the Microsoft story. Compete and collaborate. Serve the customer where they are, but concurrently build offerings that are compelling and sticky. However, if the customer is satisfied and/or committed, the company seeks to be flexible and allow users to build on their success. This is why Azure Arc being designed to support multi-cloud is an example of collaboration in even the most competitive instances. Today’s reality is that some customers will be using AWS, GCP and Azure all at the same time. And those same companies may have on-prem, virtualization and a growing deployment of IoT and Edge. It’s almost a certainty that collaboration will be a requirement to deploy the best solution, and Microsoft seems more prepared than many to share the workload, even if that means some dollars being left on the table.
This philosophy of collaboration is clearly seeded in Nadella’s strategy, and I believe it is an attractive offering for customers, inviting them to embrace Microsoft’s strengths while adapting and transforming at a pace that is manageable for them.
While the new offerings from Azure, coupled with the company’s established services are compelling, it may be equally as relevant that the company is clearly creating a culture that embraces partnership and open development, and one that even extends to competitors. This is something I see as a critical path forward in the real world where IT architecture will often be complex and ever-changing, giving ITDMs the feeling that a partnership with Microsoft will empower them to rest assure Azure.
The original version of this article was first published on NetworkWorld.
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio