November 12, 2010, 2:57 PM — Microsoft is trying to avoid admitting that enhancing Azure to make it more like Amazon's EC2 will inevitably bring it into competition with companies in its own reseller channel -- as many channel companies warned in 2008 when Microsoft first started talking about selling Software + Services.
[ See also: Microsoft vs. Amazon Clouds: 5 Key Differences ]
Microsoft announced both Azure and the Business Productivity Online Suite (BPOS) (the name sings, doesn't it?) at the PDC in 2008, to, at best, muted response. Some channel partners liked the idea because it gave them something to sell they didn't have to build; others thought they'd end up competing directly against Microsoft rather than being able to sell it.
Gartner analyst Neil MacDonald told Network World that adding the ability to launch and control individual instances of Windows Server as virtual machines makes Azure more competitive with Rackspace and other Microsoft-centric hosters.
Rackspace has actually already slid out from under the potential for channel conflict, according to Lew Moorman, president of loud at Rackspace, which started out as a PAAS just like Azure, but expanded sooner to give customers direct access to the VMs, storage, I/O and other data-center elements.
Rackspace is a Microsoft partner, but figures releasing its proprietary, basic cloud-management software as the open-source OpenStack will eliminate minor conflicts like that one by accelerating the commoditization of basic cloud functions, Moorman said.
With the basics covered -- APIs, data access, load balancing -- service providers will compete on extra services they can provide on top of those basic functions, allowing the lowest-common-denominator stuff to act as a de facto standard operating platform.
That won't help Microsoft and its channel problem, but it's focused more on competing with Amazon's EC2, the other of the two Big Cloud Vendors whose name everyone knows.