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What Satya Nadella Means to Azure's Future

Here’s what I think Satya will bring to Microsoft’s Server and Tools Business

With the recent changes in the leadership of one of Microsoft’s key business units – Server and Tools – from Bob Muglia to Satya Nadella one can’t help speculating what this means for the business unit and how it will affect Microsoft’s cloud strategy, specifically Windows Azure – Microsoft’s platform as a service.

Here’s my uneducated guess based on the assumption that given a new task humans tend to use the same approaches which worked well for them last time, and that Satya definitely got this post as a recognition for successfully rolling out Bing and transforming Microsoft’s search business from nothing to a competitor really frustrating Google.

Here’s what I think Satya will bring to Microsoft’s Server and Tools Business:

  • More focus on online (Azure) than on Windows Server: Bob Muglia made Windows Server business a success, this was his kid, while Windows Azure (one could argue) was kind of a step-child, imposed on him and added to his business during a re-org. Satya will likely feel much different: for last few years he has been “living in the cloud” leading Bing, and Steve Ballmer very explicitly made lack of cloud focus the reason for changing the business unit leadership.
  • Compete against the market leader: Bing clearly was developed to compete against Google. I guess this means that now Azure development will become aggressively anti-Amazon.
  • Acquisitions and partnerships: so far Azure has really been a ground-up effort by Microsoft engineers, Bing team tried to buy Yahoo, and when this did not work hired a lot of top talent from Yahoo and finally essentially acquired its search and ad business. Satya was directly involved in these efforts. So who is a runner up in IaaS business who Microsoft could acquire to get more visible in that space? Rackspace? Savvis? Although, one could argue that search share was more relevant in search advertising business in which the big get bigger (why even bother advertising with small players?) and this advantage of scale is not as relevant in hosting, so acquisitions might not be as effective. We will see…
  • Not sure if Azure appliance emphasis will persist: Azure appliance made a lot of sense under old leadership. Server and Tools Business knows how to sell to enterprises, so let’s turn Azure into an appliance which we can sell to our existing biggest partners and customers. Will Satya feel the same? I don’t think Bing folks were paying much attention to Microsoft’s search appliance strategy leaving this all to SharePoint/FAST and concentrating on pure cloud play…

There were speculations after Ray Ozzie left that Azure might get de-emphasized – after all Azure was one of Ray’s pet projects. With Satya’s appointment, I would say that we should expect Azure to only gain priority at Microsoft. We’ll see how applicable will Bing experience be for making Windows Azure a top player in the cloud platform space.

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More Stories By Dmitry Sotnikov

Dmitry Sotnikov is VP of Cloud at WSO2, building the cloud business for this leading middleware provider. Check out the WSO2 Cloud platform at http://CloudPreview.WSO2.com

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