Microsoft goes after Google and Amazon with hybrid cloud push

It's pushing to get out of rivals’ shadow with Dell partnership, app marketplace

hybrid cloud

With a series of cloud announcements on Monday, Microsoft moved to put a stake in the ground with hybrid cloud computing and emerge from the shadow of cloud rivals Google and Amazon.

"This helps get Microsoft onto an equal footing with Amazon and Google, who are the most talked about cloud players today," said Dan Olds, an analyst with The Gabriel Consulting Group. "It's a smart move. It gives Microsoft a unique offering that can't easily be matched by its competitors right now."

At a news conference in San Francisco Monday afternoon, Microsoft CEO Satya Nadella and Scott Guthrie, the company's cloud division chief, pushed Azure, Microsoft's cloud platform, and announced a deal with Dell to offer a private cloud package of software and hardware for its Azure services.

Microsoft also announced its G-series of virtual machines, powered by Intel Xeon processors, premium storage for Azure and the availability of its cloud services in Australia; by the end of the year Azure should be operational in 19 regions around the world.

Microsoft is also launching the Azure Marketplace, where users can find services and apps.

"The enterprises of today and tomorrow demand a cloud platform that is reliable, scalable and flexible," Nadella said. "With more than 80% of the Fortune 500 on the Microsoft cloud, we are delivering the industry's most complete cloud -- for every business, every industry and every geography."

Guthrie said Azure is signing up 10,000 new customers a week. And Nadella pointed out that 20% of Azure is now running Linux and supports various operating systems.

With Microsoft putting more emphasis on private, as well as public, cloud offerings, the company is clearly beefing up its hybrid offering.

A hybrid cloud -- running part of an enterprise's systems on a public cloud and part on a private cloud -- is an increasingly popular option for companies.

Although some firms rely on a public cloud for the cost-savings and convenience of offloading maintenance and worry to a third-party -- freeing up their own IT people to tackle bigger, more innovative projects -- other companies need the added security and customization of a private cloud.

Then there are the enterprises that want non-sensitive data on a public cloud, but need a private cloud for critical systems and information or because regulatory issues require added security.

Those are the kinds of users Microsoft hopes to pull in -- users that might otherwise go to Google, Amazon, IBM or HP.

"Microsoft understands its primary market is the enterprise," said Jack Gold, an independent analyst. "Having a hybrid cloud capability -- which is very popular with enterprises, especially in regulated industries -- makes sense for them."

He also noted that by adding a hardware component to its offering, Microsoft could find a way around the so-called price wars going on between Google and Amazon. "I see this as a smart move for Microsoft to stay out of the low-end commodity fray, and be a solid provider of business cloud services, no matter what flavor you want," said Gold.

Microsoft's moves could have its high-profile cloud competitors looking over their shoulders.

"They'll put up a strong fight, even where Google and Amazon have their greatest strength," said Rob Enderle, an analyst with the Enderle Group. "I think both firms always knew Microsoft was going to be a problem for them. This just reminds them of that fact."

Olds agreed.

"Amazon and Google aren't selling hardware for a private cloud," he said. "That's the difference. Microsoft, with Dell, is.... Microsoft and Dell are both respected enterprise vendors, so I think this new offering will certainly get the attention of enterprise buyers."

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