Major Microsoft re-org to avert Windows' cloud cannibalization
Talisker money maker for on-premises Azure
Exclusive Microsoft's $14bn server and tools unit has undergone a major shake up in order to squeeze money from the Windows Azure cloud without cannibalizing Windows Server and tools.
The unit has ramped up product and business development executives whose goal is to quickly build sellable products and services and sign up ISV and developer partners, according to internal Microsoft emails seen by The Reg.
Furthermore, under the re-org, Microsoft has accelerated plans to let people outside of its own data centers run versions of the Azure computing and storage fabric – something Microsoft had until now resisted.
Fresh resources have been allocated to Project Talisker, a months' old initiative to build and sell versions of Azure that customers and hosting partners can run on their own premises.
A brand-new communications unit has also been created to try and push a unified and consistent cloud-computing message spanning all S&T products and services. The unit – under a former internet explorer general manager and senior product director Amy Barzdukas – will pound press, analysts, and customers using public and analyst relations and executive speeches.
Normally, communications are carried out on a product-by-product basis, but the Barzdukas' unit stands in its own right and has been equal ranking with S&T's infrastructure marketing, business platform, and developer marketing units under Bob Kelly, Eduardo Rosini and Eddie Amos.
All four report to overall S&T marketing vice president Robert Wahbe, who continues to report to S&T group president Bob Muglia. The move means Microsoft is taking a leaf from IBM's book of marketing so-called "solutions" that wrap in disparate and integrated products.
Amos' developer marketing, meanwhile, has taken ownership of technical computing – created in May under general manager Bill Hilf – to win developers to Windows-Server based HPC and block them going to Linux. Developer marketing is also home to Visual Studio and Silverlight.
"We are moving the Technical Computing group... to recognize that the key battle for Technical Computing is winning developers to our platform," Microsoft's emails said.
Also, a joint data center virtualization and platform team has been created to compete with Linux and Unix.
The massive overhaul is already been put into effect, for Microsoft's new fiscal year that began on July 1.
Microsoft is expected to start by hitting partners with the cloud message at this weeks' World Wide Partner Conference in Washington, DC, where Wahbe and Muglia will keynote.
According to the Microsoft emails, the shake-up is designed to make money from Azure and cloud by spanning S&T's diverse products. The company believes it has "opportunity to grow significantly in the Tier 1 Enterprise" and cloud but that it's also under "intensive competitive pressure" from VMware, Oracle, and LAMP – the open-source stack of Linux, Apache, MySQL and Perl, PHP and Python rocking the cloud.
Until now, Microsoft has tried to attract PHP developers to Azure and Windows Server by making PHP and Azure and Windows work better together at a programming and deployment level.
Next page: Paging genuine customers
Doomed to Fail
Everything that MS do in this market must first abide by rule Number One: No product or service shall threaten the existing Windows/Office hegemony.
The first sentence of the article says;
"Microsoft's $14bn server and tools unit has undergone a major shake up in order to squeeze money from the Windows Azure cloud without cannibalizing Windows Server and tools."
Which sums rule #1 up perfectly.
Clearly, MS expect to sell the same number (or more) of Server Licences while at the same time selling access to their cloud service. This is unlikely to happen.
*If* cloud based services do take off, they will most likely do so because business want to offload the management of servers within their datacentres.
Microsoft cannot allow that to happen.
So, they will do whatever it takes to ensure that owning your own server (aka buying a Windows licence) is always the more attractive option.
This is how big monopolies eventually fail. They put too much of their resources into protecting their existing market position and they are unable to change when the market changes.
It is why their phone strategy is where it is today. They insisted that the "Start" button paradigm must be expanded to mobiles despite it being an arguably poor UI for the mobile form factor. But they had to do it because they had invested so much into the look and feel of Windows that they were desperate to ensure that this style of interface somehow become the defacto standard.
It's also why Windows Tablets are crap. The UI does not translate to a touch screen well at all but MS execs were not about to mess with the look of Windows just for the sake of an emerging market.
This is why Ballmer is often saying "the familiarity of Windows" when launching crappy products into new markets.
The meltdown continues ...
With any luck at all, nobody will tell the post-Gates MSFT that a common goal, mission statement & business plan are a good idea when it comes to multi-billion dollar multi-national corporations. To me, it's kinda fun to watch 'em thrash about, trying to find a market beyond the desktop that they used to have locked in ... hopefully they will be out of my misery before I'm "officially" retired in fifteen years or so.
Take bazooka, aim at foot, look into the exhaust, fire. We need a foot icon for "shot himself in the foot".
MSFT just guaranteed that it will lose the war with Google in the long term. If you are to survive as a company in the long term you have to cannibalise your own revenue from time to time and eat your own dogfood. This reorg puts a stop to both so it is quite obvious what the end-result will be.