Microsoft's sprawling cloud
Image: MIcrosoft / Protocol

Microsoft's sprawling cloud

Protocol Enterprise

Welcome to Protocol | Enterprise, your comprehensive roundup of everything you need to know about the week in cloud and enterprise software. This Thursday: how Microsoft's hybrid cloud vision continues to evolve, this week in enterprise tech earnings and why race car pits need more QA engineers.

Also, don't miss next Tuesday's Protocol | Enterprise virtual event "Today's Transformation, Tomorrow's Developers," featuring Cecilia Flores of Weebee and Amit Zavery of Google Cloud, and starting at 12 p.m. PT. It's going to be fun, so register here.

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The Big Story

Light a (hybrid) fire

The next 10 years of cloud and enterprise computing are not going to look like the last 10 years. And with that world in mind, Microsoft continues to outline a vision that plays to its strengths as a legacy IT company.

All the buzz from Microsoft Ignite this week was around Microsoft Mesh, a new virtual reality platform covered by my colleague Janko Roettgers, which was announced via a trippy underwater virtual press conference and ended in an awkward dance party. (Real events can't come back soon enough.)

But the bread-and-butter announcements from Microsoft this week point toward two key elements of its product strategy for the Roaring '20s, version 2.0: hybrid cloud and Microsoft Teams.

Microsoft has long been a cheerleader for a hybrid approach to modern enterprise computing. At some points along the way that sounded more like a way of rationalizing both how far behind AWS it was in cloud services and the huge installed base of on-premises server software it oversaw.

  • But the past couple of years have shown that the market values Microsoft's approach. Azure Stack — on-premises hardware coupled tightly with cloud services — led to similar products from Google and AWS in a short time.
  • At Ignite this week, Azure Arc, an extension of this concept that helps companies manage hybrid applications, was updated with several components including new machine-learning tools and support for Kubernetes.
  • Microsoft also extended the hybrid concept to edge computing with the introduction of Azure Percept, a combination of hardware and software designed to let companies build AI-driven applications in constrained computing environments, such as outdoor facilities or manufacturing plants.
  • And it previewed Windows Server 2022, which will be an interesting inflection point for Microsoft's enterprise business. There are still a ton of people running Windows applications both in the cloud and on-premises that might want to upgrade to the latest version, but the bulk of the growth on all major cloud services involves Linux.

Microsoft Teams represents the front end of the company's enterprise software efforts, and Microsoft couldn't have picked a better year to start urging Skype for Business users to move onto Teams than 2020.

  • Teams usage skyrocketed during the pandemic, and this week Microsoft added support for a few more enterprise-friendly features.
  • Teams calls are now encrypted end-to-end, and Teams users can share channels with other users outside their organization (lots of Slack users — including Slack employees themselves — maintain channels with customers and partners for discussions and even customer support).
  • The deadline for moving from the online version of Skype for Business is the end of July, which means that customers who have held out to this point are running out of time to make a call about their next-generation internal communications technology.
  • Teams is one of the most central, visible parts of Microsoft's plan to own modern enterprise software, and retaining the millions of users who flocked to it during the pandemic will be one of its most important tasks for the years to come.

A few other Microsoft Ignite tidbits that flew below the radar but are worth noting:

Microsoft CEO Satya Nadella has overseen tremendous change at one of tech's foundational companies in the last six years, reinvigorating a company that appeared to have lost its way. By his telling this week, more changes are coming.

  • "We will need to foundationally transform how cloud can drive the next level of broad economic growth that everyone can participate in," Nadella said. "We are at peak centralization right now," he said, and if current trends continue "we will require more sovereignty and decentralized control."
  • Microsoft's infrastructure cloud strategy dovetails nicely with that opinion, geared around hybrid, multicloud and multiple operating systems.
  • However, it's unclear how urging customers to adopt a centralized one-size-fits-all Microsoft Office suite of business software fits into that vision.

The enterprise market is bending in Microsoft's direction at the start of the new decade, but the companies that envision the future aren't always the ones that make it happen in the end. With AWS and Google committed to similar strategies, the company still has to do a lot right in order to make its early vision a reality.



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This Week On Protocol

Talking points: I took a deeper look at one of Microsoft's Ignite announcements that vaults the company into a crowded space, fighting to enable developers to embed voice and chat services into their applications. Azure Communication Services builds on top of communications tech developed for Microsoft Teams, and allows companies to talk to their customers by adding the service to their existing apps.

Is it Tony's time? Tony Bates has been helping push the envelope of tech communications products for two decades, and is now getting a chance to run a company that's trying to make the big leap from providing on-premises technology to software running in the cloud. Joe Williams talked to the ex-Skype CEO who has straddled the lines of tech, management and venture capital over a unique career in the industry.

WhatsApp 2.0: In keeping with this week's communications theme, David Pierce takes a look at how WhatsApp might have an interesting opportunity to provide businesses with voice and chat services, especially in the wake of the pandemic. "I think it's important that on the business side, you build tools that meet the business where they are, and work to their workflows," Will Cathcart, head of WhatsApp for Facebook, told Protocol.

This week in enterprise earnings

Around the Enterprise

  • Amazon and AWS were hit with a lawsuit alleging a pattern of sexual harassment and racial discrimination filed by a current manager at AWS.
  • Netflix has consistently pushed the envelope of cloud architectural thought, and posted a lengthy explanation detailing how its current Cosmos platform "combines the best aspects of microservices with asynchronous workflows and serverless functions."
  • The Next Platform makes the bull case for IBM, which would entail Big Blue getting customers interested in Kubernetes to think about running it on IBM's Power servers.
  • Running Microsoft Exchange servers in your data center? You should quickly patch these security flaws, after exploits were discovered in the wild.
  • Google struck an interesting partnership with Allianz and Munich Re in which Google Cloud customers will be able to purchase insurance against cyber security incidents in exchange for insurance providers being able to see the security controls used by those customers to determine pricing.
  • What do Protocol | Enterprise and Linus Torvalds have in common? They both had their productivity hit by the ice storms that struck the Portland area two weeks ago! Though for the Linux creator, the widespread power outages almost delayed the release of a new version of the Linux kernel.
  • In our continuing series loosely called "Maybe Software Should Take Breaks Between Meals," a Formula E driver had to go to hospital after crashing directly into a wall following a brake failure attributed to an "incorrect software parameter."



Could Your Business Use 1PB of Free Cloud Storage?

Register now and attend Seagate Datasphere 2021 Virtual Event for a chance to win a massive 1PB of Seagate Lyve Cloud storage for your business.

We've got an incredible lineup of industry experts who will discuss the most formidable challenges regarding enterprise data storage.

Register Now

Thanks for reading — see you Monday.

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