Client News
Giants Join Microsoft in Cloud (Azure)
Roger Cheng & Jeanette Borzo, Wall Street Journal
July 13th, 2010
SAN FRANCISCO—Microsoft Corp. said on Monday it had lined up a host of well-known customers and partners for its Azure cloud-computing system, the latest indication that companies are embracing remotely located information-technology services for their businesses.
The Redmond, Wash.-based software giant said Dell Inc., Fujitsu Ltd. and Hewlett-Packard Co. will sell Azure as part of their data-center products. They will also sell services for companies shifting their IT infrastructure to cloud computing.
"We think this is the future," Bob Muglia, who runs Microsoft's server and tools business, said in an interview. Mr. Muglia said he expects large businesses that currently operate their own data centers to begin switching to Azure, a move he said would be both convenient and efficient.
Microsoft's announcement comes as cloud computing, a broad term for services delivered over the Internet, emerges as one of the most fiercely competitive areas in the technology sector.
The jockeying has already caused a reshuffling of allies and rivals among tech's elite companies. For example, Cisco Systems Inc.'s move into the virtual-server business has turned former partner H-P into a heated competitor.
Many companies, like Microsoft, are counting on cloud computing to spur a new leg of growth. Global revenue from cloud services is expected to grow 16.6 % to $68.3 billion this year and more than double to $148.8 billion by 2014, according to market watcher Gartner Inc.
Cloud computing has grown in popularity because of the cost savings it offers companies, as well as the speed and agility it gives them to develop applications and services. It often allows companies to expand their IT infrastructure with a less significant upfront investment than traditional technology.
Online auction giant eBay Inc. is among those companies embracing cloud computing. The San Jose, Calif.-based company plans to deploy Microsoft's Azure cloud products in two of its three primary data centers later this year, it said as part of the Microsoft announcement.
"We can get a lot of agility and faster time-to-market with cloud computing," James Barrese, an eBay technology executive said.
Of course, cloud computing is still an emerging technology. Many companies are willing to move some of their operations to the cloud as they experiment with the concept of remote IT. But few are making a wholesale shift.
"It's not like these guys are taking their technology, ripping it all out, and putting it in the cloud," said Steve Hilton, an analyst at U.K.-based research firm Analysys Mason.
Still, Microsoft is far from alone in staking a claim in the new market, especially by providing cloud infrastructure.
Online retailer Amazon.com Inc. is one of the pioneers in the field, renting out computing power to corporate customers. Server virtualization giant VMware Inc. is working on a direct competitor to Azure that it is developing with Salesforce.com Inc., a pioneer in on-demand software. VMware is also working with parent EMC Corp. and Cisco on Acadia, an efficient-data-center system.
Most midsize and large businesses work with consultants. International Business Machines Corp., for example, competes with Microsoft in hosted e-mail and messaging systems, often stitching together technology from different companies.