Microsoft offers details of its new Azure Appliance

The appliance configuration is best for internal deployments of around 1,000 servers; pricing has yet to be worked out

On Monday, during the kickoff of Microsoft's Worldwide Partner Conference being held this week in Washington D.C., Microsoft announced that it would be releasing a version of its Windows Azure cloud computing platform that can be run as part of an appliance offering.

The appliance name may be a bit misleading though -- Microsoft's Azure Appliance is not your standard single server appliance. The appliance configuration is best geared for internal deployments of around 1,000 servers or so, said Bob Muglia, president of the Microsoft server and tools business.

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"Our initial [deliveries] of the Windows Azure to our first four customers will just be under a thousand servers" each, he said. The company could scale future deployments down to smaller offerings, though at a certain point it would become more economical for an organization to use the Azure services offered by another provider.

"Windows Azure is designed to run on thousands of nodes at a time. Its core value is survivability of node failures and you need to have a significant number of nodes beneath it," wrote Forrester analyst James Staten, in a blog post about the offering.

In a press conference following the announcement of this technology, Muglia revealed a bit more of how Azure would work, though Microsoft is still sorting out many of the details, such as pricing and whether there will be numbered versions.

The appliance version will contain copies of Windows Azure, Microsoft SQL Azure and a set of configuration tools and will be run on large packages of servers and supporting equipment. Dell, Fujitsu and Hewlett-Packard all pledged to offer versions of this appliance, built on their own hardware.

Once settled in the data center, the appliance will be connected to Microsoft's own instance of Azure. "We will maintain a flow of new software down to all of the appliances so they will be kept up to date," he said, adding that the customer will retain control over factors such as when to apply updates and which services to deploy.

Muglia said that while the company will make available its hardware specifications for the Azure appliance software package, Microsoft doesn't expect it to be as widely implemented as Windows Server, which was designed for as wide a range of server hardware as possible.

"One of the things that allows [Azure] at the scale that we do is to automate many of the processes that today are done by hand. In order to do this automation, we have to have a fair degree of understanding of the hardware environment. So there will be a more limited set of hardware we support," Muglia said.

In terms of making the Azure services compatible with Microsoft stand-alone software products, "Our goal is to make Azure as compatible as we realistically can. Now the cloud environment does bring differences, particularly in dealing with scaling out as a fundamental attribute of the application, which means some applications will need to be modified as they become a truly native Azure application," he said.

Despite the fact that there will be multiple instances of Azure running, Microsoft probably will not start numbering versions of Azure, though. "I don't anticipate we'll have versions of Windows Azure. I think we'll be thinking of Azure as a service that will be delivered that will have certain capabilities at certain points of time," he said.

Muglia promised that as Azure evolves, Microsoft will endeavor to maintain backward compatibility with applications written for earlier evolutions of Azure. "There will be some times when we introduce things that will affect that compatibility of applications, and what we will do is continue to support the older implementations for some period of time. We're still working on the exact period of time," he said.

One of the first users of the Azure appliance is eBay, which has already used the public Azure cloud to run its iPad application and plans to run the Azure appliance in two of its data centers.

While already having a robust infrastructure in place, eBay is looking at ways to improve its ability to scale up and down applications, as well as move them around on an as-needed basis, said James Barrese, eBay vice president of technology, in an interview at the conference.

"The main thing you get is the automation. Instead of me having to build all that automation, I can focus higher on the stack and building next generation technology for users," Barrese said. Barrese did not divulge how many servers each Azure instance would run, though noted eBay's engineers would be working with Microsoft engineers to better understand how to scale Azure to large deployments. At present, the company runs a modified Java platform on Windows servers, and Azure may provide another way to scale out the platform.

Microsoft has not settled on pricing, or even a pricing model, for the Azure appliance yet. The company is looking to make it as granular as possible, perhaps driving it toward a pay-for-what-you-use model. Microsoft's own version of Azure charges by such factors as the amount of CPU, network bandwidth, storage actually used. "Our pricing will evolve based on what our customers want to do," Muglia said.

Muglia predicted that Microsoft's Azure instance will the "most standardized version of Azure," while partners will customize their own offerings for their particular market.

Not surprisingly, the value added resellers, integrators and other Microsoft business partners at the conference have expressed worries that Microsoft may be competing with their offerings with its Azure service, though Muglia insisted that this wasn't the case. Because Azure can lower maintenance costs, it allows such partners to focus more on providing their own customizations.

Muglia explained that, together, both Microsoft and its partners can go after a larger market with Azure: That of data center operational costs. Only about 10 percent of an average enterprise's IT budget is devoted to software purchases, while 40 percent goes to maintaining a data center. Azure can offer organizations a way to cut those data center costs, while providing more revenue for Microsoft and its partners, he explained.

"Every year, about $500 billion is spent on running data centers. There is no chance that Microsoft will run all of that ourself, or even a small percentage of that. So we took this service and provided it to our partners to build into their infrastructure," he said.

Also, by allowing partners to provide Azure services, Microsoft is expanding the scope of the technology, a possibly wise move given that multiple cloud providers are now offering Java-based cloud platform services.

"Microsoft gets to proliferate Windows Azure to more geographies, data centers, and users than it could purely on its own," Forrester's Staten wrote.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab's email address is Joab_Jackson@idg.com

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