Microsoft embraces, celebrates enterprise roots in cloud push

One thing Microsoft(s msft) knows after all these years is enterprise users. And all that accumulated knowledge from Windows, Windows Server and Office could come in handy as businesses weigh a move to cloud.

So on Monday, both Microsoft CEO Steve Ballmer, in what will likely be his final letter to shareholders, and Executive VP of Cloud and Enteprise  Satya Nadella, embraced that enterprise DNA in touting the next flock of Microsoft Windows-oriented software to come down the chute — Windows Server 2012 R2 and System Center 2012 R2 Server  and Visual Studio and .NET 4.5.1, all slated to ship October 18. If you have followed Microsoft over the years you will be familiar with this notion of massive “waves” of products which, when you think about it is very different from what public cloud leader Amazon Web Services(S amzn) does with its fast-flying services that update seemingly every month.

New for Azure — a government cloud and volume licensing

More to the point for cloud watchers, Microsoft is also launching a new “government” Azure cloud — it already has the FedRAMP certification for it — and its giving business customers with volume Enterprise Agreements — basically multi-year volume software licenses — discounts on Windows Azure services. And Windows Azure is now part of Equinix Direct Connect program, meaning that other customers in Equinix data centers can connect right into Azure services with minimal latency.

It is in this whole area of selling cloud in a way enteprises are used to buying IT, that Microsoft has expertise.  Many big IT buyers want enterprise licensing and service level agreements (SLAs) that they are comfortable with.

At a press event Monday, Nadella credited Amazon for getting out early in public cloud and stressed that Microsoft partners with Amazon, but it’s clear that these two behemoths will compete for many of the same customers, as Amazon tries to show it’s cloud is worthy of mission-critical data and apps and Microsoft tries to show that it “gets” cloud, period.

Windows Azure, said Nadella, is number 2 in the public cloud after AWS, Microsoft’s ace in the hole is that it can offer customers the basic same — albeit Windows-centric– stack to run on their own servers in their own (or in partner) data centers that it’s running in Azure. In theory, that should ease workload transportability and enable hybrid cloud deployment. And hybrid cloud, as we know by now, is all the rage.

Nadella noted that joint Amazon-Microsoft customers can use Microsoft Active Directory as a “control point” for AWS workloads, and indicated that there’s a potential $2.2 trillion at stake in total IT spending which is probably enough to float many clouds.

Two big horses, but it’s not a two-horse race

Amazon and Microsoft aren’t the only companies squaring off. VMware(s vmw)  is targeting enterprise workloads with its new vCloud Hybrid Services and Google(s goog), not typically known as an enterprise player, is pushing the Google Cloud Platform — including Google App Engine — for business

What Microsoft can claim that others can’t –and a note Nadella sounded last at Structure last June, is that the fact that it’s running lots of massive and different sorts  of “first party” apps on Azure — not just Bing but Office 365 — means it has to deliver infrastructure for varying use cases.  And in his view that hard prep work is paying off. Office 365,  (which he seemed to use as an umbrella term not just for email and desktop apps but Yammer, SkyDrive and Skype) is now at a $1.5 billion annual run rate and is used by a 2.2 million businesses. He also said it is the most widely deployed SaaS application on the planet — a claim I bet crm)  would like to counter.

At any rate, one can assume from all this drama, that the race for enterprise cloud is on for real and its going to be quite the thing to watch.