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Public cloud: It’s not (just) about price says Microsoft Azure CTO

This article was originally published on Technology.Info.
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The September 2014 appointment of

Mark Russinovich

as chief technology officer (CTO) for Microsoft’s Azure cloud platform was a low-key affair: no fanfare, no public announcement, not even a press release.

Mark Russinovich, CTO, Microsoft Azure, speaking about public cloud security at IP EXPO Europe

That may seem surprising, given the high regard in which the straight-talking Russinovich is held by techies both inside and outside of the software giant - but the CTO role is just business as usual, he insisted in an exclusive interview with at this year’s

IP EXPO Europe


Russinovich and Azure are key to Microsoft

“It’s a new title, sure, but the same role as I’ve effectively been doing for four years now,” he shrugged. “All the CTO title does is formalise the role I was already playing inside Azure, which is technical strategy and architecture of the platform.”
Despite the understated explanation, the importance of Russinovich’s role should not be downplayed: Azure is a key pillar in Microsoft CEO Satya Nadella’s plan for the software giant’s future. It’s the ‘cloud’ in his frequently mentioned “cloud-first” strategy. And it’s a sizeable pillar, too: in October, Nadella publically stated that 80 percent of Fortune 500 customers use Azure and boasted of a revenue run-rate of $4.4 billion.

The giants of Hyperscale Public Cloud

That’s a hefty sales projection and a lot is clearly riding on Russinovich in the mission to ensure that Microsoft Azure can fend off competition from the other two giants of the public cloud: Amazon, with Amazon Web Services (AWS), and Google, with the Google Cloud Platform. Where each stands in comparison to its rivals is notoriously difficult to ascertain: all three companies tend toward secrecy when it comes to disclosing revenues, customer numbers or server numbers, which makes any kind of apples-to-apples comparison nigh-on impossible.
According to Russinovich, all three cloud providers operate today at a level he calls ‘hyperscale’.
“When you look at the public cloud today, it’s us, Amazon and Google. No-one else comes close. They can’t even hope to compete. But Microsoft, Amazon and Google - we’re all operating at the same order of magnitude in terms of server footprint in the public cloud.”
But there are several important points of differentiation, he insists, and one of them is regional coverage. Microsoft Azure covers 17 regions right now and Nadella has recently announced plans to add two new regions in India. “Just with 17, that’s two times the number of regions as Amazon and five times the number of regions as Google,” he says.
So the three companies are not just competing on price, then? That, after all, is the popular perception, in part fuelled by Microsoft’s public commitment to match AWS on pricing for storage and compute services earlier this year.
Price is less important than one might think, Russinovich counters. All three public cloud providers operating at hyperscale are able to negotiate great deals with hardware providers, by buying pared-down infrastructure in massive volumes, he explains. And they all use a high degree of automation to keep management costs low. The end result is that all three can pretty much price-match each other in an almost indefinite game of tit-for-tat. In other words, price alone is not a long-term strategy for public-cloud differentiation.
But an emphasis on price also seriously underestimates the needs of enterprise customers, he says. They’re looking for a public cloud with other ‘stuff’ built on top. Azure, he says, now has around 200 value-add services built on top of it: databases, Hadoop big-data frameworks, machine-learning tools and so on.

Creating a public cloud that is truly open