Day1 Forrester Cloud Presentation

How Cloud Computing is Transforming Microsoft
John R. Rymer

February 1, 2011

2011

Cloud is the 3rd bet-the-company
transformation in Microsoft‟s history.


Agenda

1. Microsoft’s cloud computing pivot

2. How Microsoft is progressing with its cloud pivot

3. What Microsoft‟s cloud pivot means to you

4. Microsoft‟s latest attempt at mobile relevance

5. The role of CRM and other applications

6. My top 10 questions


Microsoft‟s goal: Make the latest industry transition

Build broad new development platform.

Transition current businesses to a common
cloud-based platform.

Expand into new markets.

Raise the @#$%&! stock price.


Source: Charleston Post and Courier, March 7, 2008

Microsoft‟s goal: IT as a service
IT Utility

Applications

Data Annuity revenue

Runtime Pay, expand as you go
Middleware SLAs
OS
Open
Virtualization
Hybrid clouds
Servers

Storage

Networking


Let‟s take a step back: What is cloud computing?

 A standardized IT capability (services, software, or infrastructure)
delivered as-a-service via Internet technologies in a self-service and pay-
per-use model.

Elastic
capacity

Self-
Virtualized
service

Pay as you
Multitenant
go


3 consumption models: IaaS, PaaS, and SaaS
IaaS PaaS SaaS

Applications Applications Applications

Data Data Data

Runtime Runtime Runtime

Middleware Middleware Middleware

OS OS OS

Virtualization Virtualization Virtualization

Servers Servers Servers

Storage Storage Storage

Networking Networking Networking

9 © 2011 Forrester Research, Inc. Reproduction Prohibited IT manages Vendor manages

How Microsoft cloud is related to on-premise
products

Services Customer or
Platform Microsoft Service Provider

Microsoft or
Service Provider

Customer

Server
Platform Service Provider
Customer

How cloud is changing Microsoft‟s business model

PC Many devices

Windows Azure

.NET Open Web

Office + SharePoint, UC

EAs + Subscriptions, ads

Software + Services, hardware

The strategy targets new enemies
Core .NET Core Java

The Open Web


The .NET vs. Java battle is over

Source: Forrsight Software & Services Survey, Q3 2010


Agenda

1. Microsoft‟s cloud computing pivot







Microsoft‟s cloud portfolio for business is large and
growing

PRODUCTIVITY COMMUNICATIONS
COLLABORATION BUSINESS APPS MANAGEMENT STORAGE PLATFORM


Microsoft‟s cloud strategy is very broad

Office  
Communications   
Collaboration   
Business Apps    
Management  
Database   
PaaS     
IaaS   
Appliances  

Awareness of Microsoft's cloud is high, but 3rd
Which vendor(s) does your firm currently use/plan to use for pay-per-use hosting of virtual servers?
Amazon Web Services (AWS) Elastic Compute Cloud (EC2) 40,5%
Google App Engine 26,0%
Microsoft 24,9%
IBM 19,7%
HP (including EDS) 17,5%
Don‟t know 15,6%
Rackspace/Mosso 15,2%
Other 12,6%
Dell 12,6%
Verizon Business 10,4%
salesforce.com‟s VMforce 10,0%
AT&T Synaptic Hosting or Compute 8,6%
Terremark 4,5%
Savvis 3,7% • Confusion of cloud and
Capgemini 3,0%
hosting is rampant.
GoGrid 1,9%
The Planet
• The market is highly
1,5%
CSC 1,1%
Skytap 0,7% fragmented.
SoftLayer Technologies 0,4%
Layered Tech 0,4%
Flexiant FlexiScale (formerly Xcalibre) 0,4%

Base = 269 North American and European IT executives and technology decision-makers that currently use or plan to use
pay-per-use hosting of virtual servers

Source: Forrester‟s Forrsights Hardware Survey, Q3 2010

Developer engagement with cloud is nascent,
and there‟s no clear platform winner yet
“Are you developing for the cloud?”

Yes (8.6%) “Which cloud-style service provider is your
primary deployment target?”

Microsoft Azure 32%

No (91.4%) Amazon EC2 24%

Google AppEngine 15%

IBM 3%

Salesforce 4%
Base:1023 App dev professionals Forrester –
Dr. Dobbs Developer Technographics Q3 10 Slicehost 1%

AT&T 1%

Other 21%

Base: 81 development professionals deploying to
the cloud – Dr. Dobbs DevTechnographics Q3 10

There‟s more interest in IaaS than PaaS

“What are your firm’s plans to implement or expand its use of PaaS/cloud computing/virtual servers?”

██ Don't know ██ Planning to implement in a year or more
██ Not interested
Interested but no plans Not interested
██ Planning to implement in the next 12 months
Don't know
██ Interested but no plans ██ Implemented, not expanding in a year or more
Planning to implement
Planning to implement in the next 12 months Implemented, not expanding
██ Expanding/upgrading implementation
Total
3% 4% >= planning
PaaS (software
buyers) 17% 26% 38% 8% 5% 20%
3%
IaaS (software
12% 19% 37% 14% 9% 7% 33%
buyers)
3% 4% 1%
IaaS (hardware
buyers)* 42% 43% 6% 1% 12%

(percentages may not total 100 because of rounding)
Base: 1,007 North American and European enterprise IT executives and software decision-makers
Source: Enterprise And SMB Software Survey, North America And Europe, Q4 2009
*Source: Enterprise And SMB Hardware Survey, North America And Europe, Q3 2009


What if cloud isn‟t a product yet

Enterprises Partner
Microsoft knows need ecosystem not
SKUs and EAs consultation to yet fully
adopt engaged

Result: High
Adoption is Pressure for
cost of sales
slower than more solution
and unnatural
needed “SKUs”
motions


Wanted: Cloud-building experts

 Chief Software Architect
 President of Server & Tools Division

 President of Microsoft Business Division

Contact steveb@microsoft.com


Microsoft cloud SWOT
Strengths Weaknesses
• Started early. • Leadership in flux.
• Large cloud portfolio. • PaaS bet not paying off.
• Office 365. • Broad strategy unfolding slowly.
• Hugely profitable. • Azure requires rare talents.
• Reasonable vision. • Marketing limited by old thinking.
• Security/compliance requirements
• Geographic reach.
• Ecosystem not yet engaged.

• Beat IBM and Oracle to enterprise • Google
cloud
• Amazon
• Deeply penetrate telecoms
• Salesforce.com
• Bridge consumerization gap
• VMware
• Extend Office franchise
• Open Web, open source
• Profit from the next platform
• Apple

Opportunities Threats

Agenda



3. What Microsoft’s cloud pivot means to you





What‟s in Microsoft‟s cloud for you?

Rewards

Deployment speed

Financial alignment

Outsource your hassles

Safety valve for peak loads

Easy sharing


What risks do you have to overcome?

Rewards Risks

Deployment speed Security, compliance

Financial alignment Loss of control

Outsource your hassles Integration challenges

Safety valve for peak loads Vendor lock-in

Easy sharing Total cost


How to think about private vs. public cloud

Public Cloud

Existing Data Center

Private Cloud,
Hosted Cloud


Deciding whether and how to “cloud”

Applications
Security &
and
Compliance
workloads

Funding, Operational
economics controls


Agenda




4. Microsoft’s latest attempt at mobile relevance




Microsoft targeting mobile in the enterprise, doing
pretty well

August 2010 “Define Your Mobile Development Strategy”

More than 7 In 10 shops allow some employees to
choose their device

December 2010 “Mobile Development Goes Multiplatform”


Can Microsoft miss the young SuperConnecteds?

25- To 34-year-olds that make
most intensive use of mobile
devices.

November 2010 “Europe Mobile Technographics®: 2010”

Microsoft will also need developers, is behind

December 2010 “Mobile Development Goes Multiplatform”


Agenda








We have a winner! Microsoft CRM

Forrester Wave™:
CRM Suites For Large
Organizations, Q2 '10

June 2010 “The Forrester Wave™: CRM Suites For Large Organizations, Q2 2010”

And again …

Forrester Wave™:
CRM Suites For
Midsized
Organizations, Q2 '10

June 2010 “The Forrester Wave™: CRM Suites For Midsized Organizations, Q2 2010”

But Microsoft‟s portfolio also contains duds

Forrester Wave™:
B2C eCommerce
Platforms, Q4 „10

October 2010 “The Forrester Wave™: B2C eCommerce Platforms, Q4 2010”

My top 10 questions

1. Why the leadership changes? What‟s the plan?
2. How will Microsoft unlock the cloud development (PaaS)
opportunity?
3. Which of my OLTP apps can I easily host in Azure?
4. Will enterprise cloud adoption require more consulting services
than Microsoft has typically provided?
5. What is the plan to create more Dynamics “winners” like CRM?


My top 10 questions

6. Will Microsoft support iPhone and Android native development
using Azure?
7. Will Microsoft create a Java strategy for Azure?
8. Is the Windows franchise different from the Azure franchise?
Explain.
9. Will Microsoft guarantee the security of my apps, the privacy of
my data, and the compliance of my processes? How?
10.Will my costs go down if I use Microsoft‟s cloud? Explain.


Thank you

John R. Rymer With contributions from:
+1 650-581-3857 James Staten (jstaten@forrester.com)
jrymer@forrester.com Jeffrey Hammond (jhammond@forrester.com)
Twitter: @johnrrymer Julie Ask (jask@forrester.com)
www.forrester.com Bill Band (bband@forrester.com)

© 2009 Forrester Research, Inc. Reproduction Prohibited

Day1 Forrester Cloud Presentation

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