Windows Azure Appliance

Jul 20, 2010 Posted on Jul 20, 2010 in Cloud Fit, Cloud Platforms, Economics, Featured | 0 comments

Last week, Microsoft announced the Windows Azure Appliance in an effort to bring its well-received Public Cloud Strategy within the confines of the DMZ. So why is this a big deal ? The Azure appliance is probably the industry’s first private “Platform as a Service” from a major platform vendor. This has the potential to disrupt the cloud computing landscape and this note explore the implications of the Azure appliance.

Who are likely to be the biggest users of this appliance ?

Large Enterprises
Companies that are adept at running their datacenters and looking to dip their toes in cloud computing will find this notion of a private Azure cloud appliance very appealing. In addition to modernizing their application stack to make it more “Service Oriented” and Cloud friendly, they get most of the advantages that Azure provides them without worrying about privacy and compliance. One thing they will miss out is the dynamic elasticity that they would have got from the public Azure cloud.

Service Providers
This is an area which will likely see explosive growth and mass adoption. I predict providers rolling out purpose built clouds catering to industries, regions etc. At this time, many business details like cost, licensing terms, country availability, SLAs etc are not clear and are likely in the process of being defined. Service providers can and probably will roll out custom clouds which cater to specific industry needs like HIPPA/PCI compliance. There is a strong chance that we might soon see clouds for Financial Services, Healthcare, Retail Payments, etc.

Government Agencies
Apps.gov is a good example that many Federal, local and State agencies have already started consolidating their data centers and application procurement for common functions. For the last couple of years the Federal Government has been in the forefront of defining Cloud Computing requirements albeit on the Infrastructure as a Service side. The Azure appliance will be interesting to the government for several reasons including data security , privacy and compliance reasons.

Why the Azure appliance wont be ubiquitous in the near future:

Dependency on new purpose built hardware: Although we don’t know what the appliance would cost, requiring customers to buy hardware along with the appliance instead of just making it run on existing hardware will make it a much harder decision. The promise of the cloud was to move away from having to buy significant hardware and invest in managing them in-house. The appliance does just that unless Microsoft evolves it over time.
Scale: The bar for using the appliance is hundreds/thousands of servers. While this might make sense for a handful of large enterprises or ISVs, it is a significant barrier for most businesses. This leads me to believe that the appliance will be more popular with the service providers first who can build “clusters” of special purpose clouds aimed at specific verticals.
Operations: Running an appliance that has 1000+ servers is not for the faint of heart. You need to have sophisticated processes ,tools ,skills etc to pull it off. Add the complexity of the new world of private clouds, it will take quite a ramp up before organizations can be mature enough to roll out enterprise wide private cloud offerings that take into account automatic provisioning, metering, chargebacks, dynamic scaling etc.

While it is still early days, I predict that the appliance will continue to lower the barrier to adoption and push the “fence sitters” to try the public Azure on their non-critical assets to get acquainted with the cloud model. Another trend we can expect to see gaining ground is that of “hybrid clouds” or “sometimes cloud” where businesses can use the cloud to process excess capacity needs or use cloud to augment existing capabilities.

One thing is clear with the Azure appliance announcement – Microsoft is no longer afraid to cannibalize Windows Server licenses and perhaps is seeing the potential of winning over new converts to its cloud. Though Amazon has a head start, the cloud computing game is just getting started and Microsoft is a market definer in many categories including the one we are discussing here – Private PaaS Clouds.