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Why Microsoft Cloud will win the Enterprise IT market.

I have been working with cloud technologies (Iaas, PaaS and SaaS) since 2010. Over that time I have had a few opportunities to evaluate cloud vendors against each other in order to determine which offering would meet a given client’s needs at that time.

The first such opportunity that I encountered was an evaluation of where to host a new cloud based SaaS solution that my client was building. Even back in 2010, I knew that they should not build this in a colocated facility or buy servers to host it themselves. The client’s growth of the application was unknown, but they wanted to be able to scale quickly as demand increased. This is a classic case where a company should consider implementing in the cloud.

So at the time, I did an evaluation between two IaaS offerings that on paper fit the bill for what the client needed, Amazon’s AWS and Microsoft’s Azure. Back then, Azure was still in its infancy (I’m sure Microsoft would even admit that) and it was almost not a fair comparison. AWS offered so many advanced features that Microsoft couldn’t even touch. Plus since the client wanted to host their database on MySQL, there was nothing at the time that Microsoft offered to compete with Amazon’s RDS service for MySQL.

So in the end, the recommendation was to move forward with AWS. Invero resources helped to build the environment as well as the application on AWS. We built a solution that was highly scalable for a very cost effective operating budget, which was important for a startup that was low on cash flow in the early days.

Fast forward three years to 2013 when another client who had an existing on premises custom application that they wanted to move to the cloud. There were many reasons they wanted to move to the cloud, which are out of scope for this post, but needless to say they had some specific requirements and concerns when selecting a cloud vendor relating to security, reliability and scalability.

Once again, an analysis was done and comparison between leading cloud providers at the time and the short list once again came down to Azure and AWS. However, in the three years that had passed since the previous example, a lot had changed in the world of cloud technologies that made the vendor selection a little more challenging.

The comparison between AWS and Azure was not as clear cut, but in the end, AWS was recommended for the client. The maturity level of AWS compared with Azure in 2013 was still leaps and bounds ahead, but admittedly Microsoft had made significant progress towards catching up to Amazon in this respect by this time.

As I’m writing this post it is yet again another three years hence and if I were to have to do the same evaluation again, it would be a very different story. Granted, the ultimate recommendation would heavily depend on what the client’s requirements are, but if we were to assume the requirement was to move (or implement) an Enterprise IT application to the cloud then I would hands down recommend Azure over Amazon. Let me explain why.

Microsoft has been heavily embedded in Enterprise IT for decades, and the majority of IT shops are using Microsoft technologies (at least in Western Canada where our client base is). As a result, these IT shops are very familiar with Microsoft technologies so continuing to use variants of these products in the cloud is not a far stretch for most people.

Now take into account the fact that Microsoft is taking a cloud first approach internally and with many of their products now and going forward. This means that a large portion of Microsoft’s investment is in building their products specifically for the cloud and what we are seeing is that they are coming out with versions of their classic products that are offered as Platform as a Service (PaaS) rather than something you install on a VM somewhere.

PaaS and SaaS are more cost effective options when compared to building and hosting services for an enterprise. The power of PaaS/SaaS is that an IT shop no longer needs people who will maintain the base level components (e.g. infrastructure, OS, the host application). This means no more patching, no more software upgrades and a lot less (read different) troubleshooting when an application is not working. Instead, IT can focus on what is truly adding value to its business, which is usually closer aligned with the line of business application rather than the infrastructure that supports that application. Think of the savings to your company and how you can better utilize your resources by doing so.

Microsoft already offers many of their Enterprise products as PaaS/SaaS solutions. To name a few: Sharepoint (Sharepoint Online), Exchange (Exchange Online / Office 365), IIS (Web Apps), SQL Server (SQL Azure), MS Project (Project Online), Visual Studio (Visual Studio Online). In addition, Microsoft is building new PaaS/SaaS offerings like Power BI and Azure Machine Learning. The list continues to grow as Microsoft focuses on their cloud first strategy. In fact, most of the new features that Microsoft launches arrive in their PaaS offering first while other customers may have to wait months or even years until the next software release is available for installation on premises to take advantage of these same features.

In their book, “Cloud Computing and ROI: A New Framework for IT Strategy,” Sanjay Mohapatra and Laxmikant Lokhande explain some of the benefits of PaaS and how it can help Enterprise IT move up the value chain towards providing the business real value rather than being viewed as a cost centre:

“[With PaaS] your enterprise IT organization will experience significant value including:

  • Faster time to market: … [publish your compiled code without needing to] configure an application or server again.
  • Deploy apps in minutes rather than weeks or months. …
  • Reduced Costs: … [PaaS] allows for greatly improved infrastructure utilization, removes human configuration tasks where appropriate, and provides self-service interfaces.
  • Reduced Complexity: [PaaS] simplifies ongoing application management by abstracting applications away from infrastructure and enforcing a common, inheritable architecture.
  • Streamlined Application Management: [PaaS] enables you to manage all of your applications from a central place and never worry about being outside the bounds of IT governance.”

As a result of the apparent focus on PaaS/SaaS, I believe that Microsoft is going to win out in the Enterprise IT space when it comes to cloud services. Many of the applications listed above are already used heavily within Enterprise IT environments, so the transition to the cloud is a relatively easy one. Over time, more and more of the traditional applications that we are used to purchasing, installing and maintaining will be offered as a service (XaaS) which allows IT departments to move up the value chain and away from being viewed as a cost centre towards being viewed as a true business partner that is adding value.

In an upcoming post, I will describe what it means to move your Enterprise IT department up the value chain. In order to do this, IT needs to focus less on non-core functions like managing infrastructure and instead put limited resources to work on what will create business value and make your company more competitive. PaaS is one of the answers to getting your Enterprise IT to move up the value chain. It is because of its investment in PaaS, that I believe Microsoft is going to dominate the Enterprise IT market as they continue towards making their products available as a service.