Can Microsoft Pull Virtualization, SOA, Management, and SaaS Together?

June 17, 2008

Can Microsoft Pull Virtualization, SOA, Management, and SaaS Together?

For three years in a row I have attended Microsoft’s server and tools analyst briefing. This is the vision of Microsoft that focuses on the server side of the company. A few years ago I predicted that this part of the company would get my vote in terms of growth and potential. I stand by my position. While Microsoft’s desktop division is suffering through a mid-life crisis, the server side is flexing its muscles. The transition towards power on the enterprise side is complicated for Microsoft. The challenges facing Microsoft is how to make the transition from its traditional role as champion and leader of the programmer to a leader in the next generation of distributed computing infrastructure. If Microsoft can make this transition in a coherent way it could emerge in an extremely powerful position.

So, I will provide what I think are the five most opportunities that the server and tools division of Microsoft is focused on.

Opportunity One. Virtualization as a foundation
. The greatest opportunity, ironically, is also the greatest threat. If customers decide to virtualize rather than to buy individual licenses, Microsoft could suffer – especially in the desktop arena. At the same time, Microsoft clearly sees the benefits in becoming a leader in virtualization. Therefore, virtualization is becoming the focus of the next generation of computing infrastructure both on the server and the desktop. Microsoft is making many investments in virtualization including the desktop, the hypervisor, the applications, the operating system, graphics, and overall management (including Identity Management). One smart move that Microsoft has made is to invest in its hypervisor intended to come out soon as HyperV. Rather than offering HyperV as a standalone product, Microsoft is adding the hypervisor into the to the fabric of Microsoft’s server platform. This is a pragmatic and forward thinking approach. If I were an independent hypervisor vendor I would hit the road right about now. Microsoft’s philosophy around enterprise computing is clear: unified and virtualized.

Microsoft’s management believes that within five to ten years all servers will be virtualized. To me this sounds like a logical assumption both in terms of manageability and power consumption. So, how does Microsoft gain supremacy in this market? Clearly, it understands that it has to take on the market leader: VMware. It hopes to do this in two ways: providing overall management of the management framework (including managing VMware) and though its partnership with Citrix. There was a lot of buzz for a while that Microsoft would buy Citrix. I don’t think so. The relationship is advantageous to both companies so I expect that Microsoft will enjoy the revenue and Citrix will enjoy the benefits of the Microsoft market clout.

Microsoft has been on an acquisition binge in the virtualization market. While they haven’t created the buzz of the Yahoo attempted acquisition, they are important pieces to support the new strategy. Investments include: Kidaro for desktop virtualization management (that sits on the virtual PC and is intended to provide application compatibility on the virtual desktop. Another investment, Calista Technologies, provides graphics virtualization that offers the full “vista experience” for the remote desktop. Last year Microsoft purchased Softricity, which offers application virtualization and OS streaming. Microsoft has said that it has sold 6.5 million Softricity seats (priced at $3.00 per copy). Now, add in the HyperV and the ID management offerings and things get very interesting.

One of the smartest things that Microsoft is doing is to position virtualization within the context of a management framework. In fact, in my view, virtualization is simply not viable without management. Microsoft positioned virtualization around this portfolio of offerings in the context of a management framework (System Center) for managing both the physical and virtual environment for customers.

Opportunity Two. Managing a combined physical and virtual world. Since Microsoft came out with SMS in the late 1990s, it has wanted to find a way to gain a leadership role in management software. It has been a complex journey and is still a work in progress. It is indeed a time of transition for Microsoft. The container for its management approach is System Center. Today with System Center, Microsoft has its sights on managing not only Windows systems but also a customer’s heterogeneous environment. Within the environment Microsoft has included identity management (leveraging active director as the management framework including provisioning and certificate management). This is one area where Microsoft seems to be embracing heterogeneity in a big way. Like many of the infrastructure leaders that Microsoft competes with, Microsoft’s leaders are talking about the ability to create a management framework that is “state aware” so that the overall environment is more easily self-managed. Microsoft envisions a world where through virtualization there are basically a pool of resources that are available and can be managed based on business policies and service levels. They talked a lot about automating the management of resources. Good thinking, but certainly not unique.

Microsoft is making a significant investment in management – especially in areas such as virtualization management, virtual machine management. More importantly, through its Zen-based connections (via Citrix) Microsoft will offer connectors to other system management platforms such as IBM’s Tivoli and HP’s OpenView. That means that Microsoft has ambitions to manage large-scale data centers. Microsoft is building its own data centers that will be the foundation for its cloud offerings.

Opportunity Three. Creating the next generation dynamic platform
. Every company I talk to lately is looking to own the next generation dynamic computing platform. This platform will be the foundation for the evolution of Service Oriented Architectures, social networks, and software as a service. But, obviously, this is complicated especially if you assume that you want to achieve ubiquitous integration between services that don’t know each other. Microsoft’s approach to this (they call it Oslo) is a based on a modeling language. Microsoft understands that achieving this nirvana requires a way to establish context. The world we live in is a web of relationships. Somehow in real life we humans are able to take tiny cues and construct a world view. Unfortunately, computers are not so bright. So, Microsoft is attacking this problem by developing a semantic language that will be the foundation for a model-based view of the world. Microsoft intends to leverage its network of developers to make this language based approach the focal point of a new way of creating modular services that can dynamically change based on context.

This is indeed an interesting approach. It is also a bottoms-up approach to the problem of semantic modeling. While Microsoft does have a lot of developers who will want to leverage this emerging technology I am concerned that a bottoms-up approach could be problematic. This must be combined with a tops-down approach if this approach is to be successful.

Opportunity Four. Software as a Service Plus.
I always thought that Microsoft envied AOL in the old days when it could get customers to pay per month while Microsoft sold perpetual licenses that might not be upgraded for years. Microsoft is trying to build a case that customers really want a hybrid environment so they can use an application on premise and then enable their mobile users to use this same capability as a service. Therefore, when Microsoft compares itself to companies like, Netsuites, and Zoho they feel like Microsoft has a strategic advantage because they have full capabilities whether online or off line. But Microsoft is taking this further by taking services such as Exchange and offering that as a service. This will be primarily focused on the SMB market and for remote departments of large companies.

This is only the beginning from what I am seeing. Services such as Live Mesh, announced in April, is a services based web platform that helps developers with context over the web. Silverlight, also announced this spring is intended as a web 2.0 platform. Microsoft is taking these offerings plus others such as Visual Earth, SQL Server data services, cloud-based storage, and BizTalk services and offerings them as components in a service platform – both on its own and with its partners.

Opportunity Five. Microsoft revs up SOA. Microsoft has been slow to get on the SOA bandwagon. But it is starting to make some progress as it readies its registry/repository. This new offering will be built on top of SQL server and will include a UDDI version 3 service registry. For Master Data Management (MDM) – single view of the customer, Microsoft will create an offering based on SQLServer. It also views Sharepoint as a focal point for MDM. It intends to build an entity data model to support its MDM strategy.

While Microsoft has many of the building blocks it needs to create a Service Oriented Architecture strategy, the company still has a way to go. This is especially true in how the company creates a SOA framework so that customers know how to leverage its technology to move through the life cycle. Microsoft is beginning to talk a lot about business process including putting a common foundation for service interoperability by supporting key standards such as WS* and its own Windows Communications Foundation services.

The real problem is not in the component parts but the integration of those parts into a cohesive architectural foundation that customers can understand and work with. Also, Microsoft still lacks the in-depth business knowledge that customers are looking for. It relies on its integration partners to provide the industry knowledge.

The bottom line
Microsoft has made tremendous progress over the past five years in coming to terms with new models of computing that are not client or server centric but are dynamic. I perceive that the thinking is going in the right direction. Bringing process thinking with virtualization, management, and federated infrastructure and software as a service are all the right stuff. The question will be whether Microsoft can put all the pieces together that doesn’t just rely on its traditional base of developers to move it forward to the next generation. Microsoft has a unique opportunity to take its traditional customer base of programmers and move them to a new level of knowledge so they can participate in their vision of Dynamic IT.

About Judith Hurwitz

Judith Hurwitz is an author, speaker and business technology consultant with decades of experience.

  1. Thanks for the information shared here. that was an interesting and informative. I had a good experience by participating in the Cloud Computing and SOA Conference in 2009 which is most influential Business Technology Conference covering latest innovations and trends of Cloud Computing, SOA and its technologies. I learnt lot of new technologies in Cloud Computing and soa. And I am planning to attend 2010 edition as well. I found the information about the conference from btsummit dot com

  2. […] who has been following the Microsoft market for some time now, says the software giant has been slow on the uptake of opportunities such as service oriented architecture, mainly because its traditional home turf has been on the programmer and client side of the […]

  3. […] Judith Hurwitz asks if Microsoft can manage to pull together five opportunities for service. Virtualization, managing a combined physical and virtual world, creating the next generation dynamic platform, SaaS (and more), and SOA are all mentioned as a unique opportunity to take Microsoft’s traditional customer base of programmers and move them to a new level of knowledge so they can participate in their vision of Dynamic IT. Popularity: 1% [?] […]

  4. Great article… One other technology “bandwagon” that MSFT has been exploring (albeit slowly) is open source. I’d be interested in reading your thoughts on how they might integrate their OSS strategy in, especially with regards to SOA, and the “next-gen dynamic platform”. Might they be able to achieve all this with improved interop with other modeling languages? That seems like an instant competitive advantage over what other SOA/platform companies are providing (i.e. mostly Java based). OSS technologies could help them achieve that, plus solve their ongoing struggle with how to position themselves in a world where OSS is here to stay. What do you think?

    Thanks for this good food for thought!


  5. […] Posted by Channel-V on June 18, 2008 Just stumbled on a nice article by Judith Hurwitz about Microsoft. As an analyst she has had the chance to get a good view on the Microsoft tools division, based on the current technology trends she has set out the five focal points for Microsoft according to her. […]

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