Microsoft sees tens of millions of corporate e-mail accounts moving to its data centers over the next five years, shifting to a business model that may thin profit margins but generate more revenue.Email seems to be the canary in the coal mine. During the first major shift email was the killer app, now it seems email again may be well positioned to be at the forefront as companies begin to discover the benefits to scalable hosted model. Microsoft seems to think a hosted exchange service is the key, companies like Mailtrust (Aquired by Rackspace) who are already doing this type of service are ideally suited to take advantage of this movement.
Chris Capossela, who manages Microsoft's Office products, said the company will see more and more companies abandon their own in-house computer systems and shift to "cloud computing", a less expensive alternative.He goes on to say;
"A lot of companies are not ready to take their money out of the pillowcase and put it in the bank."This is a great analogy, cloud computing is all about trust, I trust my bank will keep my money safe, therefore I give it to them because it's safer, more secure and easier to manage then keeping it under my bed.
I wasn't totally sold this statement;
In a services business, the customer will pay Microsoft a larger fee, since Microsoft also runs and maintains all the hardware. But Microsoft's profit margins may not be "as high," Capossela said, even though revenue may be more consistent.As cloud computing becomes more commoditized it may become harder and harder for Microsoft to force this type of premium. This may also be why Microsoft is so interested in the Advertising model as a kind of hedge against "free as a service".
I'm asked a lot lately if there is any money in cloud infrastructure? There certainly seems to be if Microsoft is any indication of the trend towards cloud infrastructures. "Microsoft said it continues to build up its infrastructure, adding roughly 10,000 powerful computer servers a month to its data centers."
Thats a lot of hardware and I think for the most part a typical centralized data center management system will not cut it. Most data center management systems were not designed to manage hundred of thousand or even millions of physical and virtual machines. I think we're going to start seeing a lot of these large federated data centers start to looking and acting more like a botnet then your traditional hosting environment.
Read the whole article here: