Not too long ago an article posited whether Microsoft was irrelevant and it spurred a great conversation between myself and the award winning Microsoft experts Jerod Powell (CEO/Founder) and Dan Schneiderman (CIO) at InfinIT. Below is part 3 of what we’ve broken up into a 4 part series stemming from the conversation.

Part 1 – Is Microsoft Azure Still Relevant?
Part 2 – Thoughts on Azure Pricing, Support & Open Source Competition

Changes at Microsoft & Evolution of the Cloud

JEROD: Another change at Microsoft is that they’ve started to learn to play nicer with people. They’re integrating with more solutions, acting more open instead of closed. That’s going to be some of the secret to their success in the future.

MIKE: What’s a good example of them being more open and playing nicer?

JEROD: Well, the Linux servers that you can run in Azure is part of that. Another example is getting Office for the iPad. I think it was a huge realization for those guys that “Hey, why are we not allowing Office to go on iPads and making money there?” I think they’ve woken up to the fact that every one of your apps needs to work on all the various solutions out there, because that’s how money’s going to be made with the cloud. It’s going to be transactional and application-based.

And Microsoft’s always made good applications. A lot of their applications are great. That’s another one of the reasons they’ll survive in this market.

SEAN: Yeah. I’ve got a book in my office that is called “The Illusions of Entrepreneurship” and it focuses on the reality that most people who are considered entrepreneurs are really small business owners, and that’s where – I think it’s close to a third or a quarter of the U.S. employed – are working in small businesses of some capacity.

Now we’re in the Bay Area, in the thick of all this new, hot, sexy technology that’s being positioned and sold as transforming the world. But the reality is, the Fortune 500 aren’t going to be moving to anything OpenStack-related probably anytime soon. In middle America, where the vast majority of the business owners reside, are extremely slow to adopt new technologies, and most of them are still running Microsoft.

Because of where we are, we hear about all these new technologies coming out, but the reality is, most of the population and businesses are still leveraging your basic Microsoft applications.

JEROD: I 100% agree with that. Coming down here from Seattle, having worked at Microsoft in the late ’90s, I heard a lot of the same stuff then, to be quite honest. I think people in Silicon Valley have a lot of choice and there’s a lot of technology and innovation here which influences Valley businesses.

But if you look at across America, or middle America especially, you’re right, there’s Microsoft everywhere. I don’t know about you, but as a small business owner myself, if I’m running my business with the tools that I’ve already invested in and they’re working for me, I don’t want to change them. And when it does come time to upgrade, more often than not I’m going to go with what I have as long as it’s worked okay and it’s easy to do.

So I think that Microsoft’s working on a lot of easy ways to get people off their older stuff onto their cloud solutions. And as long as they’re successful at that, I think they’re going to be fine.

MIKE: I think Microsoft is a proven, well-known commodity or product, and OpenStack might be hot now, but who knows what it’s going to look like in 5 years, right? With Microsoft, you know what you’re getting. They’ve been around forever. Companies and business owners want a company or vendor they can trust and know is backed and will be around.

SEAN: Yeah, I think the same. I get a kick recalling the people that used to walk into the data center for tours when I would walk them around, and they’d say, “Do you think the cloud is going to be a threat to the data center industry?” and I’m like, “Where the hell do you think this data’s going to sit?” There is no such thing as cloud. It’s sitting in a data center somewhere.

It’s the same dynamic I think with people who say, “Do you think with the advent of AWS and software and Infrastructure as a Service that Microsoft is going to become irrelevant?” But the reality is, you can still buy Microsoft instances on AWS. You can still buy them on SoftLayer’s cloud and Rackspace’s cloud. So it doesn’t really matter where that underlying infrastructure sits; at the end of the day, Microsoft can still be compatible with those different “cloud” Infrastructure as a Service environments.

What I’m waiting for is Azure to really step up and present itself. There’s no need for you, if you are a Microsoft environment, to deploy in AWS. We’ve got the infrastructure and employees; we’ve got everything dialed in. It’s going to be a lot easier and more seamless for you to migrate from your private, dedicated, single or multiple servers in your office into our scenario.

JEROD: Yeah, agreed. Google’s a threat, all these companies are a threat to become the dominant player, and we’ve already seen some of that has happen.

But I don’t think that also means that you’re going out of business and you’re going to become irrelevant if you lose a few of the battles. I think Microsoft learned that they were trying to rule so many areas here in the technology industry, they were bound to lose a few, and that can happen to any company. If Google or Apple manages to do that, which we know they’re trying, I think that their reign can only happen for so long, because it’s hard to keep that sort of thing up.

One of the potential problems – and this is why I think Microsoft says it’s a devices and services company now and why it keeps pushing Windows 8 on the tablets – is because it has to gain some penetration into that market. The real risk is if nobody’s on your devices anymore, if all middle America replaces their PCs with tablets and phones that are Google’s or Apple’s, then suddenly you have a whole lot of power being able to provide your own apps on those devices, just like Microsoft did back in the ’80s and ’90s. By preloading IE on those devices, they’ll have a huge one-up to really start winning the applications battle as well.

So I think it is important that Microsoft stays in the devices and services game, as well as getting as many people as they can on these services and making sure their services work on any device.


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