Blog Post

Microsoft Finally Enables Hybrid Azure Clouds

At long last, Microsoft (s msft) has taken a big step forward in its cloud computing fight against VMware (s vmw) by letting customers manage hybrid on-premise and Windows Azure environments from within Microsoft’s System Center systems management software. The news comes as part of the announcement of System Center 2012, which is now available in beta and will be available by the end of 2011. If Microsoft plays its cards right, it could give VMware a run for its money in the hybrid cloud space.

According to Amy Barzdukas, general manager of Microsoft’s server and tools business, the new hybrid capabilities are part of a System Center Virtual Machine Manager upgrade formerly going under the codename “Concero.” Whereas customers previously had to manage their private clouds with System Center VMM and their public clouds via the Windows Azure interface, Concero lets users handle both from the proverbial single pane of glass. However, Barzdukas explained, it’s not just about management, but also about developing wholly hybrid environments. For example, System Center VMM users could design applications so some parts are hosted internally while others reside on Windows Azure. The new builds upon Microsoft’s decision in October to take baby steps toward hybrid clouds by letting users port Windows Server applications to Windows Azure.

Up until now, VMware has had the hypervisor-based hybrid cloud computing market largely to itself with its vCloud initiative, but Microsoft could now change that. It looks very likely that the announcement of Windows Azure Appliance partners last year in fact foreshadowed a cadre of partners that will host and resell their own versions of Windows Azure, much like VMware’s service-provider partners offer VMware-based cloud services that users can manage with their existing vCloud tools. Already, Dell (s dell) has acknowledged it will resell Windows Azure, and Lew Moorman told me that Rackspace (s rax) is in talks with Microsoft about doing the same.

Differences between VMware-based public clouds and Windows Azure aside, both companies clearly see users not only want hybrid clouds, but they also want a broad choice of providers on which to host the public component. For vendors, this is a prime example of Joyent’s Jason Hoffman’s contention that the data center is the new box, or, as I put it in reference to Microsoft alone, turning the cloud business into the PC business. They just develop the software and let users decide on what type of PC, server or cloud provider it runs.

VMware is further along with its vCloud tools and hybrid cloud strategy than is Microsoft, but Microsoft can’t catch up if it doesn’t start competing first. Now that it can, it will be fascinating to watch this cloud rivalry grow beyond virtualization and into hybrid clouds, and to see how both of these companies stand up when the cloud strategies of competitors like HP (s hpq), Red Hat (s rht) and, dare I suggest, Oracle (s orcl) start gaining steam.