Microsoft exec: We ‘get’ the cloud

Last week I visited Bob Muglia, president of Microsoft’s Server and Tools Division, mainly to interview him about cloud computing. On my way to the conference room, I was offered coffee and directed to a large, shiny, self-service Starbucks machine. I pressed a button. The machine buzzed, whirred, and wheezed, its progress tracked by an LED readout that looked like a download bar. After what seemed like forever, it produced a good cup of coffee.

So it has gone with Microsoft’s strategy for cloud computing. For over two years we’ve heard a variety of noises, some incomprehensible, about Microsoft’s plans for the cloud. Although some business questions remain, I can report that — if Muglia’s responses to IDG Enterprise Content Officer John Gallant and me can be taken at face value — Microsoft finally seems to have brewed up a good strategy.

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Muglia began with perhaps the best practical description of the core benefit of cloud computing that I’ve heard. It’s worth quoting in its entirety:

The promise of the cloud is that by running [workloads] at very high scale, by using software to standardize and deliver a consistent set of services to customers, we can reduce the cost of running operations very substantially. And we know that the majority of cost that our customers spend in IT is associated with the people cost associated with operations. And that’s where the cloud really brings the advantages.

The main advantage in terms of how customers will be able to get better business value at a lower cost is brought because the cloud standardizes the way operations is done and really dramatically reduces that.

If you look at most of our customers, they will have a ratio of somewhere between 50 and 100 servers per administrator. And a world class IT shop might get that up to 300 or 400 servers per administrator. When we run these cloud services, we run them at 2000 to 4000 servers per administrator internally. The translation of that is very dramatic in terms of what it can do. And by running it ourselves we are also able to engineer the software to just continue to drive out that cost of operations in a way that I don’t think the industry has ever seen before.

That’s exactly right. Have you wondered why our slow and painful crawl out of the Great Recession has been accompanied by a huge surge of interest in cloud computing? Because companies have laid off people across the board, including IT admins, and have discovered — whaddaya know? — that the joint is still running with that cost taken out. Maybe with the self-service, standardization, and data center automation of cloud services they can reduce the “people costs” of IT even further.

Muglia also understands the role of Microsoft software in incurring customers’ operational costs, as he says he was recently reminded in an open forum with large Microsoft customers: 

One of the CIOs just said to me: ‘Bob, you don’t get it! We never want another software update from Microsoft again!’ And I’m like, wow, that’s kinda tough.  And then he said, “Look, we want the features, but you put all the burden on us; you put all the operations cost on us; you make us do all the work. I want you to handle it. I don’t want to take care of it.’

And that’s really the key to software as a service and the cloud all around, is how we can provide the services to our customers. Then we can keep them up to date. We can keep the value associated with the new technology flowing into the IT organization, into the company, and thus generate the business value — but then they don’t have to pay all the cost and have the training and everything.

Microsoft has already achieved that happy end state with Exchange and SharePoint, which the company has made available by subscription as software-as-a-service offerings for two years. When you think about it, it doesn’t matter so much where “services” like this live — in a customer data center or on the servers maintained by Microsoft or one of its partners. What matters is that the overhead drops to the level yearned for by Muglia’s CIO friend.

That’s one of the guiding principles behind the forthcoming Windows Azure Appliance, Microsoft’s development platform as a service (PaaS), packaged for easy deployment and maintenance across multiple servers. Microsoft partners such as Dell and HP will sell the hardware with the Azure platform preinstalled. Whether in a box or offered as a service over the Internet, it’s all about driving down those operational costs:

The real fundamental idea with Windows Azure is that the application is what you focus on — you don’t focus on the infrastructure. With Windows Azure the application never thinks about a virtual machine. To me that’s the definition of PaaS, by the way. With IaaS [infrastructure as a service] you’re managing virtual machines, and there are advantages to managing virtual machines at scale. With PaaS you never see a virtual machine. You focus on the application. And with Windows Azure that’s the design point we built. So the whole system, the infrastructure, is self-maintaining. All you worry about is how you write that application so it scales out and uses these underlying services.

And so when customers have looked at that and they’ve seen it in our public cloud environment, many customers said to us ‘We love that but we want to run it in our data center.’ Or hosters and systems integrators have said, ‘This is a great model to enable applications to be built, but we want to provide it to our customers as well.’ So that’s why we’re creating this Windows Azure Appliance, to essentially package what we’ve learned, the service that we run every day, and deliver it again as a service with hardware you acquire from one of our industry partners, one of our OEM partners, and run it in a customer or service provider data center.

Muglia asserts that customers are lining up for the Azure Appliance; the first customers, he says, are deploying across 1000 servers. He adds that the Appliance will be able to serve as a gateway to the public Azure service and support bursting capabilities — that is, when customers exhaust their local infrastructure resources, they can extend their Azure platform by consuming Microsoft resources in the Azure public cloud.

Looking toward the future, Muglia also understands that that no cloud provider will have a lock on customers. He claims that Microsoft is committed to supporting a multiplatform, multivendor cloud future:

I think the most important thing is going to be interoperability between clouds. I think in the end people will look and say: ‘The most important characteristic I have is that I need the cloud services that I have to fully interoperate. And then I also need to have choice of vendor.’

Those are probably the two main things. And in both areas we’re investing significantly. All of the services that we’re doing in our clouds are based on Internet standards, either Web services or REST-based protocols, pretty much exclusively. So we’ve used those sets of standardized protocols as we’ve been building out our clouds.

Having followed Microsoft’s huge investment in Web services protocols, I can confirm that Muglia’s answer goes beyond the usual vendor “we love standards” claptrap. He even noted that the most exciting thing about cloud computing will be the wealth of new applications developers will mash up using services across platforms — an impossibility without interoperability. But of course, as many have noted, lock-in is one of the biggest risks of putting your eggs in someone else’s cloud basket. It’s hard to imagine that changing anytime soon.

Microsoft claims to have been making huge investments in cloud computing. It’s been two and a half years since Microsoft’s Tim O’Brien, director of Microsoft’s Platform Strategy Group, told me the company was building “data centers you can see from space” in its ramp-up to the cloud — and two years since Windows Azure was announced. And of late, as Muglia’s responses suggest, they’ve gotten the rhetoric right.

But can Microsoft deliver cloud versions of its applications, servers, and environments in a way that pleases customers and doesn’t mash up the company’s revenue model? I think maybe they can, but it’s taking a long time to find out.

This article, “Microsoft exec: We ‘get’ the cloud,” originally appeared at InfoWorld.com. Read more of Eric Knorr’s Modernizing IT blog and get a digest of the key stories each day in the InfoWorld Daily newsletter and on your mobile device at infoworldmobile.com.