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How Microsoft will change forever and thrive again

Serdar Yegulalp | Feb. 20, 2013
Microsoft has been in business, in one form or another, for 37 years. In the tech world, that's an eternity.

"Microsoft now describes itself as a 'devices and services' company," not merely a devices company, Blue Badge Insights' Brust says. "Devices may get top billing [at Microsoft], but services -- and the server products that power them -- certainly shouldn't be ignored."

Brust sees significant traction for Microsoft's enterprise server line, citing SharePoint, Exchange, System Center, SQL Server, and Windows Server as strong offerings that are showing significant growth.

"These products are important for two reasons," Brust says. "They consolidate Microsoft's enterprise success, and they provide credible infrastructure for user/consumer-facing products like Windows, Windows Phone, and Xbox."

Becoming a megaservice provider via its fledgling cloud platform Azure is only half the story. Microsoft's boldest long-term bet may be its desire to become an infrastructure provider à la Amazon, and to give its customers the tools to build their own private clouds or virtualize existing server setups.

To this end, Microsoft has integrated its hypervisor product, Hyper-V, directly into Windows Server 2012; it has made the bare hypervisor available as a free-to-use product (Hyper-V Server 2012); and it has contributed a Hyper-V driver to the Linux kernel so that Linux could run better under Hyper-V -- tactics aimed not just at old foe Linux but at an increasingly formidable competitor: VMware.

By giving away Hyper-V, offering free tools for migrating from VMware products, and positioning Azure as a cloud environment that's technologically compatible with Microsoft's in-house servers, Microsoft is taking aim at VMware's deeply entrenched position in the data center. Microsoft has even turned the tables on VMware's cost calculators, claiming Hyper-V yields better cost/performance ratios than vSphere under specific workloads -- yet another shot across VMware's bow.

For Microsoft, the battle with VMware is at least familiar, albeit with a services twist. Stepping into the burgeoning IaaS (infrastructure as a service) market, however, pits Microsoft against a new breed of competition from the likes of Amazon and (once again) Google. Here, adaptability will be key.

We are already seeing this in action, as Microsoft's approach to Azure has been to make it more than a Microsoft-only playground. Microsoft has added support into Azure for many non-Microsoft languages and frameworks, including Node.js and Java, and Linux-based virtual machines -- which, again, benefit from having Microsoft-contributed code to allow them to run well under Azure. Microsoft has even added support for what amounts to competition for Microsoft's own server-level products, such as Apache Hadoop for Azure.

Coming from Microsoft, this surprisingly open approach to competition within its own walls may be the key to luring converts, Forrester's Rymer and Hammond contend.

"Microsoft hopes to attract developers who don't identify with .Net today in hopes of converting them to the new Windows Platform -- and possibly even .Net -- in the future," Rymer and Hammond say in their report, emphasizing how the new .Net 4.5 Framework is "a combined client and server-side framework," with asynchronous server APIs that are designed to work hand-in-hand with WinRT's client-side parallelism features. It's another sign of how the current RT front end is meant to complement the current and future .Net back end.


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