Microsoft datacenter strategy

A good source of information on the latest developments in the tech space is the blog of Nick Carr. He is the acclaimed author of the article “Does IT matter” which made him sort of a guru on IT and cloud computing in the US. Carr just made a new post where he shares with the reader a few rumors on Microsoft’s imminent strategy announcement of the building of 20 new datacenters around the world.

I do not consider myself to be such an authority as Carr with special contacts but I was at a Microsoft Round Table discussion in December 07 for the Dutch hosting industry when this point was openly discussed by Microsoft executives.

The people from Microsoft announced that they would enter the hosting business themselves over the next few months. This created quite an uproar from some of the hosting providers present. The hosting providers are an increasingly important distribution channel but is not yet taken very serious by the top honchos in Redmond. Their SPLA licensing is very complicated indeed for the hosting industry and requires a doctorate in law.

It is easy to understand why certain hosting providers feel threatened by the entry of their supplier in their market space. For your information, Microsoft will begin offering hosted Exchange, and Sharepoint applications.

In my mind it is inevitable that Microsoft will enter our space given the competition from Google. Their recent bid to acquire Yahoo fits this vision of cloud computing from the datacenter. I think they will focus on mass market commodity products for consumers and Soho.

We at Leaseweb are not worried. Microsoft has a tendency to make a lot of noise and then remain inactive for a long period of time. That is not surprising given their size and culture as a “shrink wrap” vendor of proprietary software.

I know from experience at Leaseweb that developing a new activity like building and managing datacenters requires a different skill set which is not to be underestimated. These datacenters are like huge boiler rooms where you have to get your hands dirty.

Nonetheless, their entry in the hosting business validates our vision that cloud computing will be the future. We therefore wish our friends at Microsoft success in their endeavor. However, we expect to continue to innovate in the area of datacenter automation, energy efficiency and virtualization in order to have a compelling value proposition which satisfies our customers. That is the only recipe for success in this constantly evolving industry.

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