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Microsoft Azure capacity woes don't signal the worst

Microsoft Azure experienced capacity issues in Europe, with some users unable to spin up VMs. The company is taking 'proactive steps' for the future.

Microsoft Azure capacity problems amid the coronavirus pandemic raised alarms among some European customers this week, but the situation remains far from a calamity.

Users took to Twitter with complaints that sounded a consistent theme: When they tried to boot up VMs on Azure, they received error messages declaring that not enough capacity was available.

Cloud services and internet usage overall shot up dramatically around the world as homebound workers began using online collaboration, messaging and video conferencing tools for their jobs. Microsoft Teams and Cisco's Webex both suffered outages in recent weeks under the strain.

Prior to the Azure capacity issues in Europe this week, Microsoft signaled that capacity limits could affect some users in a blog posted March 21.

"[We] have established clear criteria for the priority of new cloud capacity," the company said. "Top priority will be going to first responders, health and emergency management services, critical government infrastructure organizational use, and ensuring remote workers stay up and running with the core functionality of Teams."

Many users questioned why Azure's public status dashboard remained full of green checkmarks -- which denote that services are in "good" health -- despite the capacity issue. A March 26 post on the official Azure Support Twitter feed sought to explain the discrepancy, saying it uses the social media feed for updates on "broadly impacting events."

However, in a follow-up Twitter message, the company said it did not yet have detailed information to share on which regions around the world lack capacity and which do not.

Rival cloud platforms from AWS and Google apparently haven't had the same capacity issues this week. For one, Google's senior vice president of technical infrastructure, Urs Hölzle, said all was well despite a technical blip.

It's not clear what effect the Azure capacity issues will have on Microsoft commercially. While Azure users could move workloads to other regions around the world that aren't experiencing capacity issues, they may not have that option due to regulatory restrictions or latency demands. They could also turn to alternative cloud platforms for some workloads quickly, but anything tied deeply into native Azure services would be difficult to move.

Still, Redmond seems well aware of the public relations hit the Azure capacity issues have caused.

"Microsoft is actively monitoring performance and usage trends to ensure we're optimizing service for our customers worldwide, and accommodating new growth and demand," a spokesperson said in a statement. "At the same time, these are unprecedented times and we're also taking proactive steps to plan for these high-usage periods."

Azure capacity woes not likely to cause lasting change

Cloud platforms have experienced outages and other types of service disruptions since their onset, but this hasn't hurt business, said Carl Brooks, an analyst at 451 Research. "It doesn't drive customers away, it doesn't change usage patterns," he said.

"There's an unprecedented amount of usage right now, No. 1, and we're reorganizing how we're doing sociality," Brooks added. Truly severe issues with cloud capacity would likely only occur if the hardware needed to build out data centers stops shipping due to the pandemic, he said.

There's an unprecedented amount of usage right now, No. 1, and we're reorganizing how we're doing sociality.
Carl BrooksAnalyst, 451 Research

That isn't to say that the likes of Microsoft, AWS and Google will build massive amounts of excess capacity in the near term as a hedge. "Amazon stays a few percent ahead of its consumption need in terms of growth," Brooks said. Such an approach is "a lot of the secret sauce that goes into making [cloud platforms] profitable."

However, Microsoft's stance on prioritizing Azure capacity for first responders and others at battle with the coronavirus speaks to a complex underlying reality for cloud providers.

"They are both a public utility, a vital part of the national infrastructure and also private companies," Brooks said.

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