This content is part of the Conference Coverage: Microsoft Ignite 2017 conference coverage

Microsoft's Cloudyn acquisition highlights challenges around cost

Microsoft cloud optimization should improve with its acquisition of Cloudyn to support Azure, as enterprises struggle to manage their public cloud bills.

Microsoft's latest acquisition highlights how the "only pay for what you consume" mantra of public cloud doesn't...

always translate to better cost controls.

Microsoft this week confirmed the long-rumored acquisition of Cloudyn, an Israeli startup focused on cross-cloud cost management and cost optimization. Microsoft Azure has tools for this already, but analysts said they're relatively lacking, and this deal fills a gap in the company's existing services.

"Organizations need better visibility and transparency into what they're spending on the public cloud," said Mindy Cancila, an analyst with Gartner. "Making this acquisition and prioritizing a solution to simplify that is a very good move."

Cancila said she expects Microsoft to either integrate Cloudyn directly into Azure or into its Operations Management Suite.

Other large vendors have similarly acquired multicloud optimization startups, including Hewlett Packard Enterprise, which bought Cloud Cruiser earlier this year. This deal is different because it represents a large public cloud provider's desire to improve management and visibility into consumption of its own resources.

Amazon Web Services recently built its own tools to help address this issue, which includes services such as AWS Cost Explorer and Trusted Advisor. Microsoft's capabilities fall short in this area, so this deal also acknowledges that enterprise spending on public cloud is substantial enough to necessitate these types of tools.

"As enterprises use cloud more, they appreciate the value in [optimization tools]," said Owen Rogers, an analyst with 451 Research, who produces a quarterly index to track the true cost of various cloud platforms. "The fact that users are more concerned about price shows they're using it to such a degree that it has to be on their mind."

Dave Bartoletti, an analyst at Forrester Research, said he regularly talks to clients who thought cloud spending and cloud management would be easy. But each service is priced differently, and it can be impossible to get a true sense for what it might cost to run something on the public cloud, so providers must respond to this complexity, he said.

"The people already in a cloud start to feel like they're getting hoodwinked and don't have tools to know if they're using it efficiently," Bartoletti said. "The people that haven't gone to the cloud start to hear it's really hard to manage cost, and they think they're going to get screwed when they get there. And that still slows people down a bit."

Cloudyn portends multicloud management within Azure

Most cloud monitoring vendors began with AWS and maintained their focus there until recently, as Azure and other platforms emerged as viable alternatives. Cloudyn was one of the first to extend support to Azure, in early 2015. Support for multiple public cloud environments creates significant challenges, so it's notable that Cloudyn was able to get ahead of that curve.

When you're No. 2, you have to be more agnostic than you would want.
Zohar Alonco-founder and CEO, Dome9

"It's like translating Chinese and Greek," said Zohar Alon, co-founder and CEO of Dome9, a cloud security firm and Cloudyn partner in Mountain View, Calif. "They're not really similar dialects or languages. So, you can do one very well, but when you introduce another," it becomes a real challenge, he said.

The vast majority of Cloudyn customers use AWS, so Microsoft can benefit from bringing in a company that has experience managing the market-leading cloud platform, Alon said. He said he expects Microsoft will continue to take advantage of Cloudyn's multicloud capabilities.

"When you're No. 1, you might not want to do that. But when you're No. 2, you have to be more agnostic than you would want," he said.

Cloudyn supports public and private clouds, so Microsoft could use the technology for intelligent workload placement between Azure and Azure Stack, too, Cancila said.

Expect more deals like this later this year, as vendors try to keep pace with the ever-expanding portfolio of cloud-based services.

"The market is white-hot, and all the metrics I see point to moving to the cloud, with 20% of workloads there by the end of the year compared to 5% last year," said David Linthicum, senior vice president at Cloud Technology Partners, a cloud consulting firm in Boston. "They can't build technology as fast as they need it as they're trying to round out the stacks."

Trevor Jones is a news writer with SearchCloudComputing and SearchAWS. Contact him at [email protected].

Next Steps

Orchestration, cost management become essential multicloud skills

Azure rolls out new native cloud monitoring tools

Compare container management tools from Azure vs. AWS vs. Google

Dig Deeper on Managing cloud infrastructure