18
Feb

Microsoft and its partners continue efforts to take down obstacles to wider cloud adoption by enterprise business

2-Color-Design-Hi-Res-100px-widthRackspace, a leading provider of managed services to enterprise businesses, reported earnings on February 17, 2015. Some remarks from its CEO, Taylor Rhodes, point to what maybe a promising indicator of enterprise business moving towards increased use of cloud IaaS, PaaS, and SaaS services. Microsoft also previewed the coming release of an Active Directory tool, which should ease the difficulty of synchronizing on-premises AD and Azure cloud AD.

Rhodes’ remarks were quoted in an interview titled Rackspace CEO Rhodes: Price Cut Curve is Flattening Out. The interview was published on the Barrons web site and was conducted by Tiernan Ray.

The heartening indicators for anyone looking for signs of more movement by enterprise business communities of computing users towards cloud offers amounted to:

  • “The mainstream market has two problems: They have legacy apps that won’t go multi-tenant automatically; they want single-tenant versions along the way; and the second problem they have is this skills set gap. Cheap infrastructure is just pouring gas on the fire. There is a need for software and tools development. Companies are saying, I don’t have access to people who know how to run all those things”
  • and Ray’s summary of some other comments appears to have made during the interview: ” . . . the company [sees] more and more deals of $100,000 or more, some of it coming from competitors such as the telcos; rising organic revenue growth (it was 16.4% last quarter, excluding currency effects); and rising operating profit margin.”

The type of enterprise software Rhodes calls “legacy apps”, in my opinion includes the “customizations” of big server applications like SharePoint, which Microsoft has found so difficult for its customers to work with as they consider migrating some on-premises processes to the cloud. The recommended methods of dealing with palpable inconsistencies between what can be accomplished with these processes, on-premises, vs the same for cloud, whether via SharePoint Online/Office 365, or Azure IaaS/PaaS/SaaS, have been reduced from tightly woven “hybrid computing” to today’s “hybrid scenarios”, where almost wholly separate processes run locally and remotely, but in service to the same communities of users.

So Rhodes’ remarks about how Rackspace has captured some of this headache as tangible business and, even better, big ticket business (presumably with attractive margin) is a heartening note and, perhaps an indicator of better news to come.

The second breathe of fresh air on this challenge is to be found in a post to the RedmondMag website authored by Kurt Mackie. The post is titled Upcoming Perks of Azure Active Directory Connect Tool.

Anyone familiar with the kind of hybrid cloud computing requirements detailed by Microsoft SharePoint MVP Fabian Williams in a video tutorial set from VisualSP titled SharePoint 2013: Hybrid Cloud should understand the critical role Active Directory must play in any serious attempt to bolt a cloud component like Office 365 or some service, infrastructure or even platform running on Microsoft’s Azure cloud. The tool is certainly promising. Should the results produce a reliable directory of users for on-premises and cloud computing venues, increased enterprise adoption of the cloud component should become more of a realistic expectation for stakeholders.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2015 All Rights Reserved

28
Oct

Let’s not underestimate the importance of hybrid cloud computing to Microsoft’s recent successful business quarter

During Microsoft’s recent Q1 2015 earning conference call, Brent Thill of UBS asked a question at the start of the analyst Q&A. This question provided Satya Nadella with an opportunity to present something about the importance of hybrid cloud computing to Microsoft’s success for the quarter. When asked what makes Microsoft’s cloud experience different from its peers, Nadella answered:

“As it turns out the technology that we build for our cloud is what we incorporate in our server products, in fact our R&D expense is the same expense. And that’s made our server products very competitive. And so again those our traditional competitors we’re seeing significant share gains across the entire infrastructure line of our server products in particular. And we hope to architected our cloud very differently. We are the only hyper scale cloud provider that also thinks of our server product at the edge of our cloud.” (quoted from a transcript of Microsoft’s Q1 2015 earnings conference call as published on Seeking Alpha)

The reference to “server product at the edge of our cloud” introduces hybrid cloud computing — where on premises and cloud servers are architected into a coordinated, comprehensive computing solution — to this otherwise purely financial discussion of Microsoft’s business performance for the quarter.

Microsoft certainly is uniquely capable of demonstrating the veracity of Nadella’s point, at least with regard to its more obvious cloud competitors — Google and Amazon. Noticeably absent from the comparison was IBM, which, (along with other mature ISVs firmly established in the typical data center for a large enterprise business), is, truly, an example of the only competition Microsoft is likely to face for this application of client server computing. Neither Google, nor Amazon supports an installed base of on premises client server computing for their own IP, so they cannot compete with Microsoft in the hybrid cloud computing space.

Regardless of who else offers solutions capable of satisfying enterprise business consumer appetite for this type of computing method, the appetite is nevertheless real and strong. A lot of research is available on the topic from most of the most popular analysts, but for readers otherwise unfamiliar with market demand for this type of computing platform, take a look at this blog post published yesterday, by Richard Fichera, and Analyst at Forrester®.

In this writer’s opinion a lot of the momentum in Microsoft’s cloud earnings report can, and should, be attributed directly the role played by Microsoft’s installed base of hybrid cloud systems. We have first hand, absolutely current experience with SharePoint and how organizations are implementing Office 365, SharePoint Online, in conjunction with SharePoint on premises. These organizations represent, literally, thousands of users. Therefore, the financial impact of this customer base should not be underestimated.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

18
Sep

When Enterprise Business Chooses Amazon AWS, or Google Compute, Microsoft Often Wins, as Well

Anyone following Microsoft should develop an understanding of how a decision by a prominent enterprise IT organization to purchase IaaS from Amazon, AWS, or Google Compute,, more often than not, is a win for Microsoft, as well.

Scott Guthrie, Corporate Vice President, Microsoft, and head of Cloud and Enterprise Business, made this point during the Citi Global Technology Conference, on September 3, 2014. Guthrie observed ” . . . in the Azure world, or even in the AWS world, we still will make money from that Windows Server license”.

One can argue most of the needs for desktop computing for enterprise businesses, and their peers in the public, and not for profit sectors, remains all about the Microsoft Office suite, so when a Microsoft competitor, either Amazon AWS, or Google Compute, lands a big deal (for example, the US CIA decision to award a contract for a private cloud to Amazon, rather than IBM), Microsoft wins, as well.

If one keeps this understanding in mind, then the question of who actually dominates the market for cloud IaaS becomes less pressing. Additional details provided by Guthrie in his presentation, and his answers to questions posed by Walter Pritchard of Citigroup portray a different picture of this market than, perhaps, would otherwise be the case based on media pronouncements about it.

The commingling of ISVs throughout the whole process is much more extensive than one would otherwise expect. Pritchard focuses on instances where Microsoft Azure provides the IaaS for enterprise customers running higher value services (like analytics, CRM, ERP, etc) from other ISVs, and asks Guthrie: “How do you ultimately think about monetizing that type of an offering, where it is a premium service, but it’s not your IP and it might be something that either others get paid on, like Oracle, or is an open source no IP technology running on top of that?” Guthrie’s answer speaks to, perhaps, a new willingness, on Microsoft’s part, to embrace an extensively different enterprise computing world, where services from many ISVs are consumed by the same organization: ” . . . [t]here’s an analogy I’ve used within the team, which is keep your old friends and make new friends.” In other words, Micorosoft has transformed itself into something of a “platform agnostic” business, with much more confidence in its ability to make money either way. This should be good news for anyone following Microsoft.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

19
Aug

Microsoft Provides Incentives for iOS and Android App Developers to Implement Xamarin with Visual Studio as their Platform

iOS and Android App Developers comfortable building solutions with C# should consider adopting Xamarin with Visual Studio as their coding platform. Microsoft is offering some financial incentives for these early stage ISVs to adopt Xamarin. Additional information about these incentives can be found on a page of the Xamarin site, titled “MSDN”, which publicizes the Microsoft offers.

Xamarin is one of a number of cross platform development offers. The biggest difference between Xamarin and its competitors, in this writer’s opinion, is the role C# plays for the Xamarin solution. C# sits at the center of the Microsoft application development paradigm. But from the promotional content on Xamarin’s site, one would also think C# is the best method App Developers can implement to maximize the value of App architecture by reducing the time required to implement the same App functionality for iOS, Android, and Windows.

The Mono Open Source implementation of Microsoft’s .NET framework is also sponsored by Xamarain, so the role Xamarin can play for Microsoft, should they magnetize critical mass across the App developer community, should be very clear. Without developers it is not likely Microsoft will successfully capture more of the mobile App market than it currently has (generally acknowledged as somewhere under 5% of the global market).

Xamarin appears to be winning over some important adopters. A quick glance at the corporate icons on the bottom of the first page of the Xamarin site attests to adoption from some very large enterprises, including Dow Jones, Kimberly Clark, McKesson, Bosch Siemens, and NBC Universal. Quick adoption on the part of enterprise business and comparably sized organizations in the public sector would make sense given the dominance of the “Microsoft stack” across these organizations.

Of course, magnetizing significant numbers of App developers from IT, and their partners servicing Line of Business (LoB) units within the same enterprises with Xamarin may ultimately prove to be good news for Microsoft’s latest product with a claim to a fast launch — the Enterprise Mobility Suite.

At a minimum, anyone harboring deep skepticism about Microsoft’s chances of establishing a legitimate position in the mobile App market may want to re-think his/her position.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

4
Aug

Microsoft Differentiates Its Azure Offers via Acquisitions

In the aftermath of the public release of Amazon’s most recent quarterly earnings report, analysts have focused on price and margin reductions for its Amazon Web Services (AWS) product line. Microsoft’s Azure is a competitor of Amazon AWS, but, per Microsoft’s most recent quarterly earnings report, Microsoft is adding services to its Azure offers via acquisitions, presumably to better differentiate its cloud, IaaS offers for consumers.

Satya Nadella, CEO, provided word of these acquisitions during the “Quarterly Highlights” section of the earnings report, and within the specific context of a mention of “high value services” for Azure, and an increasing consumer appetite for them: “To support these high value services in Azure I have prioritized acquisitions such as

  • Greenbutton for big compute
  • Capptain for mobile backend services
  • and, Just in the past few weeks, InMage for disaster recovery for hybrid clouds

Earlier this month we published our opinion on the InMage acquisition. We maintain an Office 365 E3 plan subscription and have experienced, first hand, the need for a robust backup system for our data stored in the cloud, one which can be managed by SMBs without recourse to potentially expensive third party service So we think InMage is a positive addition to Microsoft, and, to both of its cloud offers — Azure and Office 365. We do need to note Amazon AWS claims to be compatible with “many popular disaster recovery architectures” (quoted from AWS Disaster Recovery Cloud Services.

From the short message on the front page of its web site, Greenbutton appears to have been designed to work with Azure since the business commenced activities in 2006. So this acquisition is more about folding what was third party business back into Azure than it is about breaking new ground. From the promotional information still available on the Greenbutton web site, it would appear consumers with applications requiring a very rapid transformation into a cloud-ready condition would want their developers to implement the Greenbutton SDK to hasten the process. The promotional information speaks of flexible capacity planning for IaaS resources as another plus for the SDK.

Finally, Capptain looks like at least part of a solution Microsoft needs to offer to its App Developers as it grapples with how to magnetize more interest from them, and add to their ranks at the same time.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

21
Jul

Google May Come Up a Big Winner After All in the Cloud IaaS Market

Amazon AWS may be the largest cloud AWS provider, with Microsoft Azure a somewhat distant second, but Google’s Kubernetes may change all of that. This likelihood runs counter to an opinion of this writer, which provided the content of an earlier post to this blog.

The earlier post, titled Is Google’s Compute Engine (GCE) a Direct Competitor to AWS or Microsoft Azure? contended Google’s cloud, IaaS offer, Google Compute was an unlikely direct competitor to Microsoft® Azure, given its lack of direct support for Microsoft’s line of proprietary servers.

There is no indication of any changes to this status quo in an article written by Quentin Hardy and published to the New York Times Bits Blog. Rather, this blog post, titled Cloud Computing Giants Add to Open Source Credentials With Kubernetes presents an opportunity for Google’s efforts in this market of, potentially, much greater magnitude.

As Hardy notes, and Mary Jane Foley confirms in another article on this topic, this time published on ZDnet, Kubernete is Google’s effort to offer the very rich set of tools it has developed to support its Search and eMail products to the developer community via an Open Source approach.

If the initial list of committed partners — including IBM, Microsoft and Red Hat — simply add Kubernete to their lists of supported IaaS components, the rate at which users consume these tools may take on geometric proportion.

In the case of Azure, the Kubernete tool set, per Mary Jane Foley, will be made available within Azure’s lineup of IaaS components for Linux. Since Google search remains Google Search, with every implementation, more consumers will be exposed to Google products, including PPC advertising.

The benefit to Microsoft looks to be the opportunity Kubernete provides, which may transform Azure into a much more appealing solution than has been the case.

In turn, since Amazon AWS has expressed no interest in signing on, a clear differentiator will likely be created between Azure and Amazon AWS.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

17
Jun

As More Enterprise Businesses Embrace Hadoop, Intel Stands to Benefit

Of the 42 members of Hadoop’s Project Management Committee, 8 are directly affiliated with Cloudera®, and another with Intel®. Patrick Hunt, an Engineer at Cloudera appears to have played a key role in the development of a keyword search feature for Hadoop, which is not a trial achievement for a database like Hadoop, which is designed for unstructured data. Intel has an investment in Cloudera. Therefore, Intel should benefit as more organizations choose to proceed with unstructured data, and Hadoop as its repository.

Some prominent online businesses, including:

  • Amazon
  • eBay
  • facebook
  • Twitter
  • and Spotify

have made major commitments to Hadoop.

Readers are recommended to review Who uses Hadoop? to familiarize themselves with the size of an average Hadoop implementation. Of course, very large repositories of data like these require a lot of CPU resources for processing. As the leading manufacturer of server CPUs, Intel benefits from all of this need for computing power, regardless of whether an organization implementing Hadoop runs it on the Apple OS X O/S, Ubuntu, or another Linux flavor. The recommended hardware for each of these is Intel.

The tools offered by Cloudera for managing Hadoop data repositories are designed to provide enterprise businesses with familiar features and procedures. Since most of these enterprise data centers are already full of Intel hardware, Cloudera can be seen, perhaps, as another method Intel can leverage to maintain its position in these same installations.

What bearing does all of the above have on discussions about large data centers, a need for better power management, and the likelihood of hardware OEMs building solutions on the ARM architecture capturing substantial share? Given the importance of Hadoop to the leading cloud, IaaS vendor — Amazon, as well as to Microsoft Azure it doesn’t appear likely server cores running ARM architecture will quickly become the standard in these environments any time soon.

Further, Intel is certainly not standing by, but working, very actively to produce more power efficient hardware in very small form factors. One can argue Microsoft’s Surface Pro 3, which is powered by either an Intel Quad Core i3, i5, or even i7 is a tangible example of how much progress they have made to better satisfy consumer appetite for power thrifty, extremely thin computing devices.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

12
Jun

SMBs are the Low Hanging Fruit in the Corporate Cloud Computing Market, but is this Anything New?

With enterprise business moving at a very slow pace, it looks like ISVs are increasing their efforts to persuade SMBs to make the jump to cloud SaaS offers. This heightened activity should not be read as a change in focus. As far back as 2011, Microsoft published an article titled How to Sell Office 365 to SMB Customers. Google, in turn, claims 5 million customers on its Google Apps for Business web site. The Google Apps for Business customers featured on the web page appear to include a number of smaller businesses.

But the driver behind this new effort may be a renewed confidence of a substantial amount of additional sales potential in the SMB market segment for these offers. In a post to Microsoft’s “Fire Hose” news blog on its TechNet web site titled Survey shows that most small businesses feel the need to keep up with technology, but many have yet to adopt the cloud, some results of a survey, sponsored by Microsoft® and performed by Ipsos Public Affairs, of 500 SMBs point out “60 percent surveyed do not use cloud technologies”.

So, is it safe to infer the 60% not using cloud technologies amount to sales targets? If the actual market size is, as the survey claims, 28 million businesses in the US, then almost 17 million sales targets are out there waiting to be signed up.

But, hold on, the survey includes another very important statistic: of the 28 million businesses in this segment in the U.S., 92% of them, nearly 26 million, have fewer than 4 employees. Keeping an eye on just how small the majority of these SMBs actually are, then I think it makes sense to carefully calibrate just how much additional potential there is in this market segment.

What if this market segment follows the same pattern as the enterprise segment? If a mere 40% of the remaining uncommitted businesses sign up by, for argument’s sake, by 2016, then we aren’t looking at a really meaningful amount of additional revenue potential, especially when one considers the competition for those sign ups (16.8 million x 40% = 6.8 million x $20 per month = approx. $16 billion annual run rate / 2? or 3? players)

Based on this survey, the new focus (which both of the main competitors in this space, Microsoft and Google, appear to have adopted), and my math, the recent re-calibration of market valuations for a number of these cloud SaaS offers, downwards, looks very sensible to me.

How about you?

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

5
Jun

Microsoft Partners with Salesforce.com Adds More SaaS Attraction to Office 365 Cloud, IaaS Offer

Anyone listening to the webcast announcement of a business partnership between Microsoft and Salesforce.com. The webcast was published online on Thursday, May 29, 2014. The comment can be found in Satya Nadella’s presentation of Microsoft’s objective to become a “broad platform provider in this mobile first, cloud first world.” (this quote was transcribed from the webcast announcement) With this comment in mind, perhaps it’s easier to understand some of Microsoft’s recent products.

For example, analysts were caught by surprise at Microsoft’s earlier announcement of the Nokia handset’s intention to produce a smart phone on the Android O/S. A number of these same analysts also questioned the Microsoft Office port for Apple iPad tablet computers. Finally, and with direct reference to the Salesforce.com announcement, an analyst from Citibank looked to Mr. Nadella to clarify the impact this partnership will have on Microsoft Dynamics CRM customers, who also happen to subscribe to Office 365 (IMB Enterprises, Inc. maintains this type of subscription. To date, despite subscribing to both CRM and Office 365, E3 plan services, we are still unable to seamless communicate between the two platforms). Mr. Nadella acknowledged the possibility of direct competition between Salesforce.com Apps and CRM within the Office 365 “realm”.

The consistent theme running through all of these questions is an “either/or” proposition. Either the solution is Windows Phone 8, or Android. Or the solution is Office for the iPad, or Office for the Surface. But no one sees the opportunity to support all of these solutions within the same Microsoft “ecosphere”.

Mr. Nadella’s comment, quoted above, should, hopefully, dispel the confusion. Microsoft, much along the lines of Intel, and its decision to open its foundries to anyone looking to build chips in a state of the art set of facilities, is opening its ecosystem, which encompasses more than 1 billion Windows users, etc. to competitive solutions. The only caveat? They must be willing to operate over one of Microsoft’s “broad platforms”: Office 365, Azure, even Office.

Perhaps with this “and” logic in mind, analysts can see the enormous gains Microsoft stands to realize as it expands the range of popular solutions running over its IaaS solutions. The Salesforce.com partnership is a brilliant achievement (they were once a direct competitor). It will be interesting to note the outcome for Microsoft as the partnership rolls out.

Disclaimer: I’m long Microsoft and have no position in Salesforce.com

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

7
Apr

Microsoft Introduces a Comprehensive Control Panel for Azure at Build 2014

Microsoft introduced a comprehensive control panel for Azure at Build 2014. This panel is presented in a video on MSDN Channel 9 titled Azure preview portal. The narration is provided by Vishal Joshi, Principal Program Manager, and Azure Lead at Microsoft.

Microsoft has branded this new control panel as an effort to reduce the complexity of Azure. The Azure preview portal is presented along with a blog post written by Scott Guthrie, Executive Vice President, Cloud and Enterprise Group. Guthrie’s post is titled Microsoft announces new cloud experience and tools to deliver the cloud without complexity.

The video presentation captures the very wide reach of the controls, but doesn’t convey a less complicated process of managing infrastructure, processes, and people. Guthrie’s short post juxtaposes the inevitable complexity of a service like Azure, along with the preview panel as a method of at least simplifying the administrative experience for the user. When both the post and the video are considered, the new branding could use some further work.

On April 15, 2013, in a post to this blog titled How Important is the Useful Quotient for Elastic Cloud Services Like Amazon AWS? I stated my opinion of the imperative for AWS (and Azure, as its direct competitor) to simplify the management requirement for SMBs and other prospects lacking the highly technical internal resources otherwise required to get the service to work for them.

So Microsoft’s stated intention to remove the complexity of the process is a good start. But neither the video, nor Guthrie’s blog post actually convey any less a complicated experience. Microsoft apparently recognizes this obstacle. Hopefully in the near future they will present more examples of how they have worked to remove the complexity of managing Azure.

Should they manage to put together a set of tools accessible to SMBs, then the sales gains for the service look to be substantial. In my opinion much of the potential market for Cloud IaaS/SaaS offers has still not been reached.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved