Microsoft unveils Windows Azure cloud computing platform appliance, shares soar

Microsoft president (server and tools) Bob Muglia said today's move makes Microsoft the first and only company to offer "customers and partners a full range of cloud capabilities and the flexibility to deploy these services where and how they wish - whether that is with Microsoft, a service provider, in a customer datacenter or a combination of all three."

"Today's introduction of the Windows Azure platform appliance ushers in a new era of cloud computing, and we are looking forward to working with our partners to bring all the benefits of the appliance to our customers and the business technology industry," Muglia said.

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Microsoft vice president (server and tools) Robert Wahbe said the move will allow organizations to run their own cloud service in their data centers for either internal purpose or for their customers.

While Wahbe said the appliance will help "service providers, governments and large enterprises who would consider buying, say, 1000 servers at a time," gain the "control they need," Microsoft's senior manager (product development) Amy Barzdukas said customers will find the appliance useful as it "provides scale of the platform, but with the added benefit of control of the location."

"Very large customers want to be able take advantage of the cost and agility the public cloud can provide, but they need to do so with more control," Barzdukas said. "This is an opportunity for large customers that wouldn’t be able to embrace a full public cloud because of issues around data sovereignty and compliance."

While Dell, HP and Fujitsu said they will sell a limited number of the appliance besides offering Azure service for their customers, online retailer eBay said it intends to use the appliance for its internal operations. The price of the new server appliance is yet to be announced.

The announcement sent Microsoft shares soaring. At 12.40PM (EDT), Microsoft's shares were trading up 1.92 percent at $24.74 on the Nasdaq. Market analysts said Microsoft's partnership with hardware companies will benefit both vendors. According to Altimeter Group analyst Ray Wang, the move is a "huge coup" as it "shows large ISVs (independent software vendors) are still willing to bet on the Microsoft platform."

"It's also good for customers, in that now people are on a standardized platform, and a platform that has a future," Wang said.

However, the new's not good for Microsoft's cloud computing rival VMware, which makes vSphere could operating system for corporates. Analysts said Google Inc. and Amazon,com Inc., which are also trying to make inroads into cloud computing market segment, wouldn't be happy with Microsoft's announcement.

The move also puts pressure on Microsoft Dynamics partners such as Epicor, who are early adopters of Azure, to create Azure versions of Dynamics, given that Microsoft doesn't appear to have plans to do so itself.