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August 5, 2015

Microsoft splashes $10bn on Azure data centres

Software titan has invested more than $10 billion on data centres to expand its Azure cloud services.

By Joao Lima

In the cloud war, Microsoft, Alibaba, AWS and Google are all investing to expand their footprint by building out new data centres.

A Microsoft spokesperson told CBR that since opening their first data centre in 1989, Microsoft has invested more than $15 billion in building their global cloud infrastructure.

Zahl Limbuwala, CEO of Romonet, told CBR: "The scale of Microsoft’s investment lays bare the sheer cost of building and managing data centres. As investment in these backbones of the cloud continues, one of the greatest priorities for those doing the investing will be understanding not just the scale of the investment involved, but where it will be spent.

"For instance, the most cost-intensive part of any data centre isn’t the initial building, or the technology that lives there, but the systems needed to ensure that the technology keeps running as expected; from power to cooling."

Microsoft’s revelation comes less than two weeks after Alibaba’s data centre arm Aliyun Cloud Computing senior product director, Li Jin, announced international expansion in the US and Europe of the company’s cloud services with data centres being built in these regions.

Alessandro Perilli, GM of Cloud Management at Red Hat, told CBR: "In public cloud computing, like in many other industry segments, there will never be a single winner.

"Large enterprises prefer risk diversification and are learning that, whilst tool consolidation is good, different tools are best for different jobs. As long as Microsoft keeps differentiating Azure enough from AWS, they will remain a dominant player as they are today."

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However, William Fellows, research VP at 451 Research, told CBR that "Microsoft will be a winner".

Fellows said: "There won’t be a single victor here. Most firms that use public cloud are using more than one cloud, for fiduciary responsibility of nothing else. Most are using AWS with Azure. Microsoft is a beneficiary here.

"Specifically Windows Azure Pack, Systems Center 16, and most importantly Azure Stack are all accelerants for its cloud business. Users get Azure cloud – Out of the box with Windows. They also get an automatic Azure access with their Microsoft Enterprise License, whether they choose to activate it or not.

"Microsoft also provides operations management for Azure, VMware and AWS."

Leon Barrett, Operations Director at 383, explained to CBR that for Microsoft to win the Cloud War, "they need to differentiate their offering by providing products and services to the developers that are ultimately building upon their infrastructure such as support, maintenance and consultative services".

He added: "The ultimate winner of the cloud will be the company that balances price, utility and performance, giving developers the tools they need to deliver their applications at scale."

This cloud war, which is leading to multibillion dollar investments in the data centre space, is also reshaping the colo landscape with emerging technologies and trends.

Limbuwala added: "One area where we see technology developing is in creating a firm understanding of the total cost of ownership of these data centres, and just how those costs, and the eventual return on investment, will change over time.

"This means having actionable intelligence that will support data driven decision making in the data centre: it should be possible to predict the precise costs and effects of any potential actions before a single penny is invested.

"Essentially, we will see Big Data applied to data centres themselves."

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