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Major Microsoft re-org to avert Windows' cloud cannibalization

Talisker money maker for on-premises Azure

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The overall goal is to try and finally make money from Azure by targeting major IT consumers.

Last December Microsoft shifted responsibility Azure's development, business and marketing into S&T out from under chief software architect Ray Ozzie. Microsoft put development into the newly created server and cloud division with business and marketing joining Kelly's infrastructure group.

Now, a brace of executives have also shifted to the Windows Azure team to drum up partners and developer adopters. Adam Skewgar and Haris Majeed will "help quickly define the future of the Windows Azure services" while senior director of platform strategy Robert Duffner moves from open source to jump-starting adoption of Azure among ISVs and developers. Duffner's goal will be to translate his experience from working on ISVs and partners on open source to get adoption and build ubiquity for Azure.

Among the tricks at Microsoft's disposal for selling Azure is wrapping it into a Windows volume license – the kind of purchasing agreement bought by tier-one enterprises. This is something Microsoft has already been pushing to gain uptake of Office Web Applications – the browser-based edition of Office that has little real appeal if you've already licensed Office.

Combined with Talisker, there's a clear indication Microsoft will sell Azure under an enterprise-based volume license.

Also, a former Windows Server senior product manager, Scott Ottaway, has been named project manager of Talisker to help accelerate Microsoft's usual product creation process. Ottaway will report to director of product management and planning Mike Schutz. Talisker was also a project name for a previous version of Windows CE.

Microsoft has been making much about adoption of Azure, claiming it's got 10,000 customers. These numbers are suspect, though, and unlikely to reflect real-world adoption.

Typically, Microsoft signs up its most loyal customers and early adopters and brings on people via its customer council. Also, it's unclear what constitutes a "customer" – an organization or an individual – and whether users are actually active.

There's certainly been plenty of the individuals users – those who tested Azure during its trial phase whose accounts could now be active or dormant.

Meanwhile, Talisker comes as research points to the biggest opportunity for cloud being behind the firewall with customers running their own services rather than relying on service provides. IDC found 55 per cent of CIOs prefer private to public, with private clouds accounting for $11.8bn in server revenue by 2014 compared to $718m for public.

By putting Azure into S&T and surrounding it with more S&T marketing and biz-dev people, Microsoft is understood to have moved to protect its existing Windows Sever business from being cannibalized by the cloud as S&T product people will sell Azure along side S&T's other software and services. Kelly's group, meanwhile, has responsibility for business planning including setting prices and licensing of products and services - including Azure.

As a member of Kelly's group, Azure also has to fight Windows Server and Systems Center and Forefront products for valuable marketing budget. ®

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