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.