Yes, we're definitely seeing an incremental approach rather than a Big Bang. IT lends itself to trying something, seeing how it scales and then modifying it.
The first apps to go are what I call "finished apps" like e-mail and CRM. With those apps it's kind of game over. There's very little uniqueness in how we use those apps, so they are the most ready to go to the cloud. In five or 10 years, we'll look back and say, 'why did we ever think about doing those ourselves.'
Custom-built applications are different. There are regulatory issues around line of business apps that a company has built. Also, they were developed a generation ago and appropriate for the technology of the time. They need to be modified for the cloud.
Internally at Microsoft, we have a complicated licensing application that manages volume licenses bought from Microsoft and supports our whole partner ecosystem. It has 100 components and lots of interfaces. It's not that we think it won't work in the cloud, but we must modernize it first. It was built 15 years ago. It's the kind of custom-built app that can't be taken as is and moved to the cloud.
At the enterprise level, most organizations want a private cloud. In an already crowded market for private cloud offerings, what is Microsoft's advantage?
A lot of it is portability. CIOs want to take advantage of the market, and you'll have private cloud offerings built on Microsoft technology available from us, from third parties, or you can build your own. Those are all indicators of our technology advantage. From a cost standpoint, those options will make a Microsoft cloud more available and less costly over time than models that have a narrower set of deployment and development tools.
Also, if you're already a .Net developer with .Net skills, it's a pretty fast transition from where you are today to a public or private cloud with Azure. There's no skill retooling needed.
What are some factors that could prevent an organization from moving to Azure?
I think the biggest barrier are applications a company has built that were not well architected for the cloud. So in that sense you can't move them to our cloud platform or anyone else's either. Those apps just need to be redone.