On Monday Microsoft officially announced the launch of two Azure Data Centers in Australia. This is big news for the many Australia-based organizations concerned about data sovereignty, as well as those who simply equate on-shore data residency with increased security and control.
Announced as part of TechEd 2014 in Sydney, Microsoft specifically called out Amazon Web Services (AWS) and Google as it’s key competition. In fact, Microsoft has gone to great lengths over the past year plus to consistently position these two companies as the only other viable longterm cloud providers. This is based on three cloud provider capabilities identified by Microsoft as critical: hyper-scale, enterprise-grade, and hybrid.
Overall it’s a good angle for Microsoft. All three players operate at hyper-scale as public cloud providers. All three also offer enterprise-grade services, (although this definition varies based on workload). Most importantly for Microsoft, neither AWS nor Google have a primary focus on enabling hybrid cloud services.
In contrast, all traditional large infrastructure vendors (Fujitsu, HP, IBM, VMware, etc.), system integrators (Dimension Data, NTT, etc.), and telco’s (Telstra) focus squarely on enterprise-grade services and hybrid cloud enablement. Rackspace, IBM and HP also have Australia-based data centers. But all these providers lack hyper-scale.
So is this a valid consideration when you’re selecting a cloud service provider? It is for public cloud-based infrastructure as a service (IaaS). But in the broader market for cloud-based services, the number of viable cloud providers is not going to shrink dramatically in the near term. This is particularly true for larger Australian organizations pursuing hybrid cloud strategies and planning to continue relying heavily on legacy, internal systems. These organizations will strongly value the managed services capabilities offered by vendors like IBM (via SoftLayer), HP and Dimension Data.
For Microsoft, continuity and ‘trust’ are the key messages. We expect the Australia Azure Data Centers will help blunt the spread of AWS, particularly among longtime Microsoft customers. Customers at the launch event reinforced this point:
- Commonwealth Bank CIO David Whiteing highlighted CBA’s goals of leveraging standard cloud platforms, driving increased automation for improved efficiencies, and simplifying partner relationships as primary objectives. Azure was well positioned given CBA’s existing relationship with Microsoft and continued reliance on key internal systems, including the recently updated core banking system.
- Carsales’ CIO Ajay Bhatia specifically cited the widespread reliance on .Net applications internally (and availability of .Net skills within the organization) as a primary reason for selecting Azure.
- For Belinda Thompson, CIO at accounting firm BDO, leveraging the established relationship with Microsoft provided a level of confidence and trust senior business decision makers didn’t get from AWS or Google.
Microsoft is well positioned as a leading cloud provider, both globally and now locally. In fact, among all large traditional IT vendors, Microsoft is best positioned to continue thriving in the age of the customer. Azure is well positioned to support organizations’ need to shift focus and resources from internal infrastructure to standardization, agility, and innovation, all of which are critical to effectively win, serve and retain customers.