Microsoft is hurting small-business Azure adoption

It's too confusing and expensive to adopt Azure, but Microsoft could easily remove that barrier if it wanted

I reminded readers last week that it's time to plan your migration from Windows Server 2003 as it approaches its formal end of support. Unlike traditional migrations, where the concern revolves around the need to upgrade both hardware and software in the data center, with Windows Server, many businesses are considering whether or not to move the cloud at the same time. Small businesses especially are making this decision.

Small businesses focus on price and performance

One 20-person law firm I met with last week is torn. It knows its server (running Windows Server 2003) is in need of replacement. It is ready to move Exchange to the cloud with Office 365, happy to shift the responsibility for the upkeep and maintenance of email services to Microsoft. But the firm believes it still needs a server on premises to run applications critical to its business.

Thus, it's considering a Dell server running Hyper-V with a virtual machine running Windows Server 2012 R2 for Active Directory and the firm's special applications, as well as a second VM for Active Directory redundancy. At the same time, it's considering using Azure for a hosted VM environment. The firm hasn't determined what it will do yet, but the decision will come down to two factors: price and performance, in that order.

Price is key here and should be a strong selling point for Microsoft's cloud services. But Microsoft is blowing that opportunity when it comes to small businesses.

They can spend as little $500 for a Dell T110 II Tower Server -- and if they decide to go for a T320 and add in a few features to bring their price up to $1,500, it's still a cheap upgrade. When those same businesses look at Azure, the pricing grows complicated and expensive very fast.

Azure is too pricey, too complex for small businesses

From a VM perspective, Azure's pricing is still a moving target. Granted, server pricing is a moving target, too, depending on what kind of servers you buy: the number of cores, the amount of RAM, disk sizes, and so forth can make the pricing complex and more expensive.

But it's worse when you look at VM pricing for Azure: The core, RAM, and disk options can get pricey pretty quick if you're looking to do a 1:1 for what you can have on-premises with a new server. In these cases, Microsoft basically charges more for cloud usage than it does for on-premises usage.

That law firm I mentioned is looking to move its Active Directory off-premises, but it's not sure if wants to move the Active Directory VMs into the cloud or go with Azure Active Directory instead. There is no good technical reason for such a small business to have servers as VMs handling its identity management. But companies aren't yet comfortable having their identity management in the cloud.

Even when they get comfortable with identity management in the cloud (via Azure Active Directory), they face a complex set of licensing and payment options: per-user pricing for Azure Active Directory, but a different pricing scheme for their Azure-hosted VMs. It's much too complicated and will encourage many businesses to stay on-premises, where they're dealing with the devil they know.

Simplify Azure for small business, to get the desired adoption

I advise Microsoft to simplify its offerings, especially its pricing and licensing. It should offer something to migrate Windows Server 2003 Migration to Azure as an extension of the Office 365 plans for small business, with free, basic, and premium options to help get these small businesses into the cloud at a price that makes sense. For example, provide a simple option for small businesses to move to the cloud their Active Directory and possibly one VM for server applications. The item has to be simple, with clear step-by-step instructions.

I'm sorry, but Azure (even the site itself) is overwhelming for an IT admin who has been working on Windows Server 2003 for a decade and isn't up to speed on how the cloud works. Azure's pricing needs to be clear (and affordable), and the process for moving to it from Windows Server 2003 has to be clear (and affordable). Neither is true today.

As a result, businesses are sticking with on-premises deployments or hiring professional service organizations to take on the complexity -- at a much higher price. Many businesses a little afraid of the cloud and very confused by the pricing. Fix both issues, and Microsoft would see many more businesses -- especially small ones -- jump into Azure rather than deploy Windows Server 2012 R2 on-premises.