As it turned out, Microsoft was right. However, the past decade has certainly pointed to the merits of Apple's argument, and it was Apple, not Microsoft, that ended that decade on top. The next wave is to the cloud and many of us think this will be the driver for the next big wave in computing. But it had initially looked like, for this new wave, Google was on Microsoft's side of the argument and Microsoft had switched to Apple's. Fortunately, that now seems not to be the case. Let's explore this.
Azure Appliance: Dell's Advantage
My briefing on the Azure appliance initiative was done jointly with Dell and Microsoft with Dell, I think, successfully showcasing that it might be in the best shape to drive this initiative domestically. That's because it doesn't have the internal conflicts with Microsoft that both Fujitsu and HP do. It enjoys heavy support for platforms competing with Microsoft's own and is more of a x86 specialist than the other two companies. The fact that it was the only company that jointly pre-briefed a large group of us covering this technology is another indicator that these two vendors may be closer than the others.
Azure is Microsoft's cloud platform. It can be deployed as a service hosted by Microsoft, hosted by a Microsoft partner like Dell, or hosted internally and installed as a private cloud appliance on-premise by Dell, HP or Fujitsu. This provides a somewhat unique level of choice on who you buy the solution from and whether you buy it traditionally or as a secure hosted service.
While the “appliance” approach really only works for companies with massive data needs due to its potential scale, the services that Microsoft and Dell are pushing are more appropriate for mid-market companies that want the flexibility, low cost, and massive load-balancing potential of Azure, but can't possibly justify the hardware. Granted, in any hosting solution, security requirements must be met, but Dell and Microsoft should be more than capable of assisting in the validation work.
This might be one of the few times a platform has come out that is designed from the outset either to be deployed internally or as a service, reflecting both Microsoft's roots and its need to adjust to the changing landscape. This is clearly a flagship offering from the company, and it showcases the related attention to detail in both the quality of the work and the positive nature of its reception. These are both good indicators for the mid-market, which typically doesn't like the more common “science experiment” products that companies like Google have tossed its way.
Is Microsoft on a Bubble?
Microsoft is a diverse company with initiatives seemingly going in different directions at all times and that's increasingly difficult to get a read on. This suggests a lack of central control and direction, which might be corrected with recent staffing and organizational moves. For a while, with projects ranging from Zune, Xbox, Kin, and the Microsoft Stores, it appeared that parts of Microsoft were adopting the Apple/IBM model and going vertical. The problem with such a move is that it would disenfranchise partners, and these partners seemed to be increasingly hedging their Microsoft bets with Linux, Android, ChromeOS, Intel's platforms and even the purchase of companies like Palm and Wind River.
It still appears that Microsoft is on a bubble where no certain decision has been made across the company either to return it to its successful roots or to fundamentally change it into an Apple/IBM-type firm. If Azure is successful, it likely will help those that argue that returning to the company's roots is the more successful path; if it isn't, the alternative will likely be true.
There is one clear danger as Sun recently demonstrated by trying to go the other way, from hardware to software: Getting caught in the middle can be deadly.
Wrapping Up: Azure, the New Windows? The New Microsoft?
Azure has the potential to redefine Microsoft and shift the model from being hardware-centric to one that is services/annuity-centric. Such a move began more than a decade ago, and many of us think it is is overdue. However to be truly successful, this isn't a product alone, but needs to be a company transition taking it to the next step. This will be the first time such a transition has been attempted since Bill Gates left and could either prove Steve Ballmer's worth or damn him to obscurity. As big as Azure is, its importance to Microsoft is matched only by the Windows Tablet. Either could revalidate Microsoft's relevance or prove it irrelevant, if things go badly.
It's good to bet the company, but often the importance of doing so doesn't become clear until the bet is won or lost. This might be one of those times.