back to article Major Microsoft re-org to avert Windows' cloud cannibalization

Microsoft's $14bn server and tools unit has undergone a major shake up in order to squeeze money from the Windows Azure cloud without cannibalizing Windows Server and tools. The unit has ramped up product and business development executives whose goal is to quickly build sellable products and services and sign up ISV and …


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  1. Anonymous Coward


    Take bazooka, aim at foot, look into the exhaust, fire. We need a foot icon for "shot himself in the foot".

    MSFT just guaranteed that it will lose the war with Google in the long term. If you are to survive as a company in the long term you have to cannibalise your own revenue from time to time and eat your own dogfood. This reorg puts a stop to both so it is quite obvious what the end-result will be.

  2. jake Silver badge

    The meltdown continues ...

    With any luck at all, nobody will tell the post-Gates MSFT that a common goal, mission statement & business plan are a good idea when it comes to multi-billion dollar multi-national corporations. To me, it's kinda fun to watch 'em thrash about, trying to find a market beyond the desktop that they used to have locked in ... hopefully they will be out of my misery before I'm "officially" retired in fifteen years or so.

  3. Anonymous Coward
    Anonymous Coward

    Expensive new model

    Azure is as somewhat expensive and requires the developers to learn a new programming model.

  4. Anonymous Coward
    Anonymous Coward

    too expensive, too complex but powerful

    Azure is actually a pretty great platform - I'm one of those 10k customers and we're pretty happy with it, but... we're also an AppEngine customer for a different project and happy with that as well.

    Azure is certainly more expensive for us, and harder to write for (especially as it has some odd behaviour around shutting roles down) but it's also a very powerful platform and allows us to balance worker and web roles to scale where the scale is needed pretty dynamically. SQL performance may be significantly less than a real SQL Server, but the table storage is blisteringly quick.

    AppEngine on the other hand is great for quick and dirty prototyping and front-end heavy sites (the worker role concept is less well thought out there)

    Sadly because the low ramp-up friction people seem to think AppEngine is a better overall solution than Azure .... turns out not to be the case (that's why we still use Azure for our mission critical project)

  5. amanfromMars 1 Silver badge

    An Executive Decision from the Top which decides the Fate of Future Board Rooms.

    MS 42 go on an Alien Spending Spree?

    "Microsoft is understood to have moved to protect its existing Windows Sever business from being cannibalized by the cloud "

    Surely Microsoft's real concern, ..... although with Azure working in the right hands, and with hearts and minds control, would that be a virtual opportunity, ...... is that cloud will remotely utilise its existing Windows Server business. And that is a concern only whenever such cloud controllers are not proxy champions on a Microsoft retainer. One cannot "own" Clouds, one can only hope that they deliver your wishes, for they have a wicked mind of their own which can deliver everything from the gentlest kiss of a pleasant rain to a biblical flood of information which will wash Systems away.

    If you imagine such proxy champions as premier league sports and entertainment stars, Microsoft payments to them for transfer and sign on fee to play for their "club" with a stellar wedge delivered as a virtual wage for outstanding constant performance, is the way to ensure that cloud has Microsoft controls rather than just being a Base Sun Source for Independent SuperNova ..... and a Renegade AIRogue Private Pirate Power HotSpot which Established Conventional Systems cannot Control to Power and Server as a Slave Sub Prime System Unit.

    And that would make Cloud Controllers, Magical Mystery Turing Masters of the Universe?

    Do Microsoft have any Cloud Controllers on their books? Certainly none are apparent to those on the Scene and in ITs Live Operational Virtual Environment and that would leave them as just helpless hopeful wannabes, exposed to catastrophic vulnerabilities ... and/or fantastic opportunities, dependent upon which coloured hats one would be wearing, or facing.

    To imagine that Cloud is anything other than highly abnormal, is not to imagine at all, and that leaves the Field of ITs Controls out of normal reach, which you might like to consider is a Sublime Intelligent Design, given what Man does and is considered normal, because he keeps on doing it.

  6. Goat Jam

    Doomed to Fail

    Everything that MS do in this market must first abide by rule Number One: No product or service shall threaten the existing Windows/Office hegemony.

    The first sentence of the article says;

    "Microsoft's $14bn server and tools unit has undergone a major shake up in order to squeeze money from the Windows Azure cloud without cannibalizing Windows Server and tools."

    Which sums rule #1 up perfectly.

    Clearly, MS expect to sell the same number (or more) of Server Licences while at the same time selling access to their cloud service. This is unlikely to happen.

    *If* cloud based services do take off, they will most likely do so because business want to offload the management of servers within their datacentres.

    Microsoft cannot allow that to happen.

    So, they will do whatever it takes to ensure that owning your own server (aka buying a Windows licence) is always the more attractive option.

    This is how big monopolies eventually fail. They put too much of their resources into protecting their existing market position and they are unable to change when the market changes.

    It is why their phone strategy is where it is today. They insisted that the "Start" button paradigm must be expanded to mobiles despite it being an arguably poor UI for the mobile form factor. But they had to do it because they had invested so much into the look and feel of Windows that they were desperate to ensure that this style of interface somehow become the defacto standard.

    It's also why Windows Tablets are crap. The UI does not translate to a touch screen well at all but MS execs were not about to mess with the look of Windows just for the sake of an emerging market.

    This is why Ballmer is often saying "the familiarity of Windows" when launching crappy products into new markets.

    1. amanfromMars 1 Silver badge

      Ignorance is Bliss and Stealth's Prime Partner/AI's Sublime Operand*

      "*If* cloud based services do take off,..." ...... Goat Jam Posted Monday 12th July 2010 16:03 GMT

      Goat Jam,

      All are Doomed to Fail who would not already Realise that they have Virtual Remote Control of, and Beta Controls in, Cyber Commands ........ and that means that Cloud Based Service Personnel Rule the Roost?

      And would you imagine that Microsoft know of the Strategic and Tactical Importance of Excellence in ITs Fields?

      * Ignorance though, is nowhere near as helpful as Arrogance, which denies one belief in the truth of such simple facts shared in Programs and Projects Delivering Immaculate Progress.

  7. Anonymous Coward

    Exclusive: insert free advert for Microsoft

    "Microsoft's $14bn server and tools unit has undergone a major shake up in order to squeeze money from the Windows Azure cloud without cannibalizing Windows Server and tools"

    What ?

    "Microsoft has accelerated plans to let people outside of its own data centers run versions of the Azure computing and storage fabric"

    What ?

    Fresh resources have been allocated to Project Talisker, a months' old initiative to build and sell versions of Azure that customers and hosting partners can run on their own premises.

    Ah, I see, Microsofts' cloud platform isn't selling as they hoped so they're repackaging it as a small office solution. Why is this deemed news worthy enough to deserve a whole article in elREG ?

  8. Mikel
    Jobs Horns

    Beautiful strategy

    For a young group with bold new ideas that threaten the status quo the best place for it is in the division most threatened by it, the most likely to cut off its air supply.

    Brilliant! I wonder if this evolution is the one that finally convinces Dave Cutler to stop casting his pearls before swine.

    1. jake Silver badge


      "I wonder if this evolution is the one that finally convinces Dave Cutler to stop casting his pearls before swine."

      One can only wish. Dave's work at DEC was nothing short of brilliant, given the hardware resources available to him at the time ... but I suspect MS has him locked in for life, contractually speaking. It's the only reason I can see that he still works for Redmond, anyway. It's really sad to see a true visionary stifled. Not that I know anything, you understand.

  9. Dest

    Putting all of the chips on the table fo a single hand

    It's risky business making deals with Microsoft because you never know when they will abandon an idea or a product and leave the manufacturer and or the buyer twisting in the wind.

    They have done this so many times before so what confidence can anyone have in them?

    What happens when they suddenly decide that Azure does not have the high profit margin that they expected?

    Are you going to trust Microsoft to maintain it?

    As for me, there is absolutely no way I would trust Microsoft with anything given their past track record.

    I mean after all, it's Microsoft that we are talking about here.

    Microsoft run by Steve Ballmer.

    Steve ballmer should have been fired a long time ago considering his long history of failures.

    But Ballmer will not be fired even though he certainly should be.

    Bill Gates says that he "likes the job that Steve is doing".

    So obviously Steve Ballmer has some kind of dirt on Bill Gates whatever it may be, maybe they were gay or something in college or Ballmer has compromising Polaroids of Bill Gates.

    Whatever it is he has Bill Gates over a barrel so Ballmer is there to stay no matter how much he screws up and acts like a demented clown and runs the company into the ground.

    Bill Gates will never let him be fired.

    So consider this again, are you going to trust Microsoft and buy into Azure?

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