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Microsoft delays Azure Stack, will sell it only through OEMs

Waiting another six months for Microsoft's Azure Stack will be a hiccup to some IT shops, but narrowing their hardware choices for it will be far less welcomed.

Users anxious to get their hands on Microsoft's much anticipated Azure Stack cloud software will have to remain...

anxious a while longer.

The company has pushed back delivery of the software -- which offers both infrastructure-as-a-service and platform-as-a-service capabilities, as well as the ability to blend and manage legacy applications with distributed applications from a single location -- to mid-2017. When Microsoft debuted the product at its Ignite conference in May 2015, it promised delivery by the end of this year.

But Microsoft still had more disappointing news for some users.

The company is changing the way it will distribute the software. Originally, Microsoft said customers could deploy Azure Stack on any server hardware of their choosing. Instead, the company now plans to deliver the software integrated with servers only from Dell Technologies, Hewlett Packard Enterprise (HPE) and Lenovo; although, officials said they will "broaden the ecosystems of supported systems ... based on customer feedback."

Reaction to the changes from users and analysts was swift and mostly harsh.

"For Azure [IT shops], this is the most important piece of software released so far, so it is disappointing news," said a solutions architect with a large, Houston-based technical services company. "Giving competitors like Amazon another half-year to respond is not a good thing. The users I deal with daily won't like the idea of being forced into getting [Azure Stack] from just three vendors."

Azure Stack was supposed to be the quick way to get users on board with Azure -- to work across different, existing on-premises hardware, or to use the software even where Microsoft doesn't have a data center in close proximity. But building it independently proved to be harder than Microsoft anticipated, and this new distribution strategy for Azure Stack represents the biggest change in go-to-market strategy in Satya Nadella's two-plus-year tenure as CEO, said Holger Mueller, vice president and principal analyst at Constellation Research Inc., based in Cupertino, Calif.

"I guess the partners wanted to have more money, and Microsoft realized they can't resell Microsoft without partners," Mueller said.

Microsoft could have easily sidestepped the strong user objections to receiving the product through just three server hardware vendors by simply offering it as a software-only product, said Carl Brooks, an analyst working with the cloud transformation research team at 451 Research.

"I don't understand the rationale of locking it down to hardware," he said. "They could have offered it as just software and told users, 'You are on your own for hardware.' That would have been just as impactful for Dell, HPE and Lenovo, and also provided users with choice -- I mean, this isn't 2002 anymore."

Giving Microsoft the slimmest benefit of the doubt, Brooks added it's possible Microsoft's decision to deliver the offering with server hardware could have been requested by users who, in many cases, don't have enough available and trained staff to properly install and implement the software.

"Some could have demanded it be delivered in a box with a bow on top in order to make it worth their while," he said.

For Microsoft's part, it's choosing to deliver Azure Stack as a turnkey system based on customers' willingness "to trade off customization at the infrastructure layer to gain a faster time to value," as well as placing a priority on "an end-to-end solution that 'just works,'" according to a blog post by Mike Neil, Microsoft's corporate vice president of enterprise cloud.

"We will leverage our deep experience in both cloud and enterprise data center environments to optimize the customer experience," he wrote. "Predictability of system infrastructure enables Microsoft to more rapidly deliver innovation from Azure to Azure Stack."

They could have offered it as just software and told users, 'You are on your own for hardware.' That would have been just as impactful for Dell, HPE and Lenovo, and also provided users with choice.
Carl Brooksanalyst, 451 Research

The decisions around the delay and hardware choices come as IBM and Oracle build up their own offerings that provide the same stack in the cloud and on premises. That means Azure could take a hit from being later to market, especially as it seeks to expand its cloud revenues while the migration of Office 365 levels off, Mueller said.

That said, the effect shouldn't be too dramatic, since companies that are all-in with public cloud were never going to wait around for it anyway, Mueller said. And because Azure Stack is geared toward more conservative IT shops, this delay won't change their plans -- and even could be a welcome chance to hold off on making any major changes.

"Microsoft-minded customers and CIOs don't think in quarters," Mueller said.

Timing is crucial for a product as strategically important as Azure Stack, and given the formidable competitors Microsoft must face, including Amazon, said Al Gillen, group vice president of enterprise infrastructure at IDC.

"Every month counts with something like this, [and] it's disappointing to see Microsoft push it out," Gillen said. Nevertheless, he said he thinks it's better value for users to have Azure Stack delivered as an integrated turnkey appliance from partners, "although there will be some who prefer to pick their own hardware."

Ed Scannell is a senior executive editor with TechTarget.Contact him at escannell@techtarget.com.

Trevor Jones is a news writer with TechTarget's data center and virtualization media group Contact him at tjones@techtarget.com.

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How will Microsoft's new go-to-market strategy for Azure Stack affect your adoption of the technology?
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I'm beginning to feel that Microsoft realizes that the on-prem requirement is going to change significantly with app deployment using containers.  Some companies will still prefer to be able to run the full stack in-house, but new businesses are easily incented to never go down that path.

In the end, it seems that this is the only way for Microsoft to keep its partners (barely) in business.
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