Microsoft Azure: B for effort, less for execution

Microsoft (s msft) has poured money and resources into Windows Azure, its grand attempt to transport the company’s software dominance into the cloud computing era. How’s it doing? So-so.

Nearly everyone agrees that Azure has huge promise. It’s a soup-to-nuts Platform-as-a-Service (PaaS) for developing, deploying and hosting applications. And yet, much of that promise remains unfulfilled. Despite its support for a full complement of computer languages, Azure remains Windows .NET-centric.

In July 2010, seven months after Azure went live, Microsoft claimed 10,000 users. Since then, it has only said that Azure has added thousands of more users monthly. That total number may be big, but it’s unclear how many of these customers are viable commercial users as opposed to tire kickers.

For better or worse, Azure is viewed as an attempt to lock customers into Microsoft’s Windows-centric worldview, this time in the cloud. That may be fine for the admittedly huge population of .NET developers, but new-age web shops don’t take to that idea. Nor do they necessarily like the idea of having Microsoft infrastructure as their only deployment option which is currently the case.

It’s hard to compete with Amazon

A long-time Microsoft development partner who builds e-commerce websites exemplifies Microsoft’s problem. His tool set includes SQL Server and other parts of the Microsoft stack, but he deploys the sites on Amazon Web Services. (s amzn) He tried Azure, but gave up in frustration.

Why? He gives Azure an F-grade mostly because Azure is all about Azure. “It’s a programming platform that can only be used in Azure. Legacy apps are out in the cold — it’s only new development. And the coup de grace is that five years after [Microsoft leadership] finally figured out that they need to be able to run what amounts to an elastic cloud instance, they’re still only in beta with that,” he said. “Meanwhile, Amazon adds features and flourishes every month.”

He was referring to Microsoft’s decision last year to make more bite-sized bits of infrastructure available to developers — to make Azure more AWS-like. Part of this was the availability of Azure VM Roles. This technology was a step in the right direction for companies more interested in using parts of Microsoft Windows Azure infrastructure rather than the whole shebang. As Derrick Harris wrote last October:

[The Azure VM role]…is very close to what traditional IaaS offerings provide for users. In fact, AWS actually has been allowing users to run existing Windows Server licenses in its cloud for several months. By adding the VM role capability, Microsoft is making Azure a direct competitor to IaaS clouds that offer Windows instances, most so AWS.

(Update: Microsoft said the pilot for the above-mentioned AWS program has expired. The company now offers a new Service Agreement benefit for license mobility that applies to all qualified hosters –including Azure).

Microsoft also launched Extra Small Instances, at 5 cents per hour (now 4 cents per hour). AWS subsequently offered Windows Micro Instances on its cloud for 3 cents per hour.

Lack of deployment choices

Another roadblock is that, thus far, there is no option for companies wanting to run Azure-based private clouds in-house. That’s a big one for many financial institutions and others with compliance issues, said the chief architect of a company that builds internal clouds for customers. “All of my customers want and need private clouds. Azure is not there yet,” he said. He is evaluating OpenStack, the open-source IaaS backed by Rackspace (s rax), NASA, HP (s hpq), Dell (s dell) and others, for many of these clients.

Microsoft’s Windows Azure Appliance, plans for which were announced in July 2010, would make that possible for some large customers, but the product isn’t yet available. Aiming to propagate Azure beyond its own data centers, Microsoft said that Fujitsu, Dell and HP were building out their own Azure clouds to host customers. Of those three, only Fujitsu’s implementation is online. Rackspace is also talking about offering an Azure option.

Naysayers maintain that Microsoft’s Windows-Office power isn’t carrying over into the cloud realm. “Customers just do not care what’s running in the cloud — the Microsoft brand means nothing there … and Microsoft seems to think it can take 10 years to get this right, just as it took 10 years to get SharePoint right, but this is a whole new era,” said the e-commerce developer.

The CIO of a large hotel chain concurred. He’s willing to go to Azure, provided it gives him the price and service-level agreements (SLAs) he requires. But there’s nothing magic about Microsoft’s name in this space. And the lack of deployment choice means he is less likely to go there.

New age venue, new age competitors

Microsoft, which wielded its Windows-Office power to pummel dozens of rivals from Borland to WordPerfect in the client-server era may not find those weapons helpful in the cloud where companies like VMware (s VMw) and (s CRM) have more credibility. VMware, the server virtualization powerhouse, launched its Cloud Foundry earlier this year as the “open” cloud PaaS that allows developers to use their integrated development environment (IDE) of choice and deploy on their cloud of choice.

It doesn’t help Microsoft’s cause that some of its biggest hardware allies have mixed loyalties. Dell is both in the Azure and the OpenStack camp as is HP. An HP executive privately expressed concern over Microsoft’s cloud direction after the departure of Bob Muglia, the Microsoft Server & Tools president who led Azure. Muglia left last summer after a strategic disagreement with Microsoft CEO Steve Ballmer. Muglia’s departure, was “a huge red flag for us,” the executive said. Muglia’s exit was doubly unsettling coming just months after the departure of Ray Ozzie, Microsoft’s chief software architect. Many thought Ozzie brought Microsoft some needed perspective on the cloud, whereas most other Microsoft execs had vested interests in preserving their on-premises software business and had no incentive to see cloud services cannibalize their sales.

All of this isn’t to say Azure has no fans. A large integrator in the Washington, D.C. area has done some Azure deals for small and mid-market companies. “We see SaaS services as the real traction [for Azure], followed by IaaS for test, dev, disaster recovery/business continuity and storage,” he said. “Law firms have found that for some case types, [Azure] storage can be a great deal versus buying massive amounts of storage for a case that will only require the large storage need for a short time and small (usually supported on site after the initial scrub) storage amount for longer term.”

David MacLaren, CEO and founder of VRX Studios, looked at Amazon, Google (s GOOG) and Microsoft options when he needed to build a cloud-based Digital Asset Management (DAM) system. He opted for Microsoft Azure partly because all of his customers — including 10,000 hotels around the world — are businesses that already have Windows expertise. With Azure, he was also able to tap into Microsoft’s Content Delivery Network — the one used by Xbox — as needed.

When the resulting Mediavalet service needs a content delivery push, “it takes two minutes to turn on CDN to light up 25 additional data centers around the world — all without calling Akamai (s akam) and telling them how we want it done.”

Photo courtesy of Flickr user TechFlash Todd.