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What new CEO Nadella's promotion means for Microsoft's cloud

Brandon Butler | Feb. 5, 2014
Satya Nadella has grown Microsoft into a relevant cloud company, now the company has to take the next step forward.

Satya Nadella

Microsoft just appointed its cloud guy to be the company's next CEO. Satya Nadella has impressively grown Microsoft into being one of the relevant members of the cloud computing industry, but industry watchers say there is a lot more the company must do to grow into one of the dominant companies in the market.

The promotion of Nadella to be the third-ever CEO of the famed technology company is a commitment by the company to its cloud computing platform. Microsoft's cloud strategy began ambiguously, but has developed into a complete vision even though it sits in the shadows behind some of the behemoths of the industry. Cloud watchers believe Microsoft has an opportunity to be an important and leading cloud computing company, especially for the enterprise market, and it may have selected just the right leader to get itself there.

Nadella -- a former Sun employee who later headed R&D, Online Services and most recently served as executive vice president of cloud and enterprise -- has been behind's Microsoft's transition into becoming a major cloud computing company during the past few years. During its first years Microsoft's strategy focused on being an application development platform as a service (PaaS) for Windows environments. It wasn't until a few years into this journey that the company pivoted and announced an infrastructure as a service (IaaS) component to Azure to provide on-demand virtual machine and storage service.

"The initial push into PaaS, and then the sharp turn into IaaS, has left Microsoft cloud users wondering about the thought leadership within the company, including the new CEO," says cloud watcher David Linthicum.

Since the announcement of its IaaS service in mid-2012, Microsoft has slowly and steadily grown into a legitimate alternative to the heavyweight of the IaaS industry:

Amazon Web Services. Throughout 2013, Microsoft invested heavily in building up its cloud offering, adding dozens of features, from smaller niche enhancements like geo-redundant storage, load balancing and auto scaling, to core mission-critical features like building up its partner network, expanding internationally and committing to match any price cut of core services from AWS.

This growth and development has given Microsoft one of the most complete arrays of cloud offerings. In addition to the PaaS and IaaS, it is a leading platform for hosted and SaaS versions of Office 365 tools. On the private cloud side, Microsoft's Hyper-V virtualization software has slowly and surely been picking up steam in the market against VMware's dominant stance in the market. Microsoft says the ability for customers to run private clouds based on Windows Server and Systems Center, along with the same management platform running the company's public cloud, give users a seamless hybrid cloud.  


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