Microsoft to deliver virtualized servers on Azure

Another swing At the Microsoft Hosting Industry

Our fear was real. We didn’t expect to see it, we actually thought it was a rumour; but Microsoft is on a colliding path towards hosters and service providers. Todays announcement at the Microsoft PDC 2009 events proved our fear as Microsoft is going to launch virtualized server-based offering with the Windows Azure platform. Not only is Microsoft pushing their Dynamic Data Center Initiative towards hosters and service provider while behind the scenes building a strong value proposition to target the exactly same customers. Confused? I was!

Not only did Microsoft cut prices on Online Services 50% without giving the same opportunities to their partners (SPLA partners; hosters red.), but also leading a strong competition against them. Confusion must arise at partners with the leading DDC initiative whilst Microsoft launching the same services. As Bob Muglia happy announced:

“Bet on our online services, Dynamics Online CRM and Windows Azure. Focused on providing applications, infrastructure, platform, and data, now all as a service “ready for business now…They’re the foundation of everything we do.”

Why does Microsoft build this disruption? As I wrote yesterday, there is many reasonable points for Microsoft to deliver a Cloud Computing strategy. Cloud is not an evolution in the IT industry; it is the revolution! And in every revolution, somebody has to die.

What Now?
For established players in the field there is only to innovate and include competitive services to compete; now against Microsoft. For these companies, investments into their data centers, customer footprint and assets is not a 1-2 year job-position, where you just shift to a new chair if the market is changing. Of cause the DDC and VMWare initiatives can help reduce your operational costs; but deliver a new value proposition is not an option. Debts and economies are built on 3-10 year financing plans – only option is to consider Linux, third party software etc.. For the new entrants – focus your business elsewhere. You have to become really aggressive and differentiated to grow a success.

Where we believed the outsources (enterprise big dedicated hosting providers) would perish to the SaaS business model, it now seems like these players have a great differentiation.

Question: “So I want to built a business in Saas?”
Well – make no doubt that SaaS and Cloud Computing will survive. Yesterdays SaaS providers (mainly hosters) will be disrupted by tomorrows true SaaS providers (ISVs). If you want to built a succeeding business – become an ISV. Business like,, and all deliver a true SaaS value proposition. This is there the next killer app, and killer business model is.

Azure VM Role –