I have been using and selling the infrastructure-as-a-service (IaaS) pieces of Azure for over a year now, and I’ve good a pretty good grip of what Microsoft’s public cloud can and cannot do, what it is good at and what it is not, and where it needs some improvement. In this article, I’ll share my opinion on what I think Microsoft needs to do to make Azure a better IaaS solution.
My Experience with Azure
I was like many IT pros before January 2014, where I deliberately chose to ignore Azure. When Azure first launched, I actually saw it as a threat. That’s because I worked for a couple of local hosting companies, and there was no way that we could sell infrastructure at a price or scale that could compete with Azure. It also didn’t help my cause that Azure seemed to be adding functionality on a monthly basis. My role is to learn new Microsoft infrastructure technologies and evangelize them to Microsoft partners who implement those products in small-to-medium businesses. I have to be able to understand the technology and sell it to a business customer, find the hook for sales people (Hint: it’s always profit), and be able to teach the techies. It’s a challenging but rewarding role, especially when you hear that someone you’ve helped is deploying the tech for customers.
One year ago, things changed. Azure became part of my job. I found out that Microsoft was going to release Azure under open licensing, so it was going to become relevant to my customers (Microsoft partners), and therefore it was relevant to me. I started to learn the basics, experiment, and then moved onto the advanced pieces. Last July, I started to educate Microsoft partners about Azure, where most of them had heard of it, but little else. I have had some success promoting Azure, but there are several issues that I encounter repeatedly that are preventing sales and subsequent deployments in Microsoft’s cloud.
According to the mantra of the last two years, there is Satya Nadella’s One Microsoft. I would question that, as would anyone who is using Azure. What I find in Azure is that there are many product groups that are presented via two portals, the REST API, and PowerShell. And each of those product groups has a different opinion of technology in business.
Let’s start with defining a small-to-medium enterprise (SMEs). Using Microsoft licensing as a guide, a small-to-medium business starts at five users up to 250 users. While the Fortune 1000’s of the world are few in number, they employ lots of people in each company. However, SMEs are often over 90 percent of businesses in a country, and while each is a small amount of business compared to a Fortune 1000, they add up to be a lot of business as a whole.
Then why is it that Azure, the perfect place for a SME to deploy services in or consume services from, has scattered opinions of a SME? There are some features that are very clued into SMEs:
- Hybrid networking: SMEs can deploy affordable site-to-site VPNs, while large enterprises have a choice of VPN or ExpressRoute.
- Azure Site Recovery: Microsoft’s DR in the cloud was once for System Center customers only, but since late last year they have been engineering specifically for SMEs, understanding that there is a huge market potential there.
And then there are others that are less clued in:
- Azure Backup: If you want to backup anything other than files and folders from your on-premises servers, then the Microsoft solution is to deploy System Center Data Protection Manager at a cost of $3,607 (Open NL pricing for the Datacenter edition Server Management License).
While the licensing part of Microsoft says that an SME is five to 250 users, there are those in Microsoft HQ that see a SME as being up to 2,500 users. At that point, that’s a very different kind of organization that deploys a lot more IT and can afford more tooling. And then there’s the other opinion that others in Redmond have of SMEs, where they have either one server or no servers because everything is in the cloud. When you’re dealing with anywhere from five to 250 users, then there is a wide variety of complexity, from the server-less customer to one that runs a complex virtualization cluster.
I want to see one strategy with Azure; one that does not differentiate between SMEs on direct-billing or open licensing and large enterprises on Enterprise Agreements (EAs). I understand that billing for EA customers will always be different because there’s always a bulk purchase discount. But why are smaller businesses being punished for wanting to consume and use Azure? And using Azure to its fullest is something that EA customers have been poor at doing.
- Why does the EA customer get simple billing for the Azure Marketplace?
- How come a SME doesn’t get the same free storage when using Azure Site Recovery?
- Why is Inmage Scout only available to EA customers?
In short, why do some parts of Azure decide to restrict their market? You think that it would be sensible to focus on customers that are going to deploy in Azure, especially in these times when the media and stockmarket press are commenting about low utilization rates of EA customers that are unlikely to renew their $25,000 minimum annual subscriptions?
Azure, how do I manage thee? Let me count the ways:
- The management portal for access to all services
- The preview “Ibiza” portal to access new features of older services
- The Account portal for billing
- REST API
And not one of them is a complete usable management interface, and I include PowerShell in that, even for hardcore scripters.
The management portal is where all services, including the newer ones are surfaced. You won’t find the newer services in Ibiza, but you’ll find that newer features, such as reserved IPs and internal load balancing, are in Ibiza. And while I’m talking about the preview portal, how long has it been in preview? Is Microsoft trying to out-Google their competitors when it comes to the length that a product is in beta? Ibiza is constantly changing, not always for the better, and the UI is quite buggy. And don’t get me started on the subscription usage rate figures that tell open customers that they have zero credit left — who cares about SMEs, anyway?
There is another misunderstanding when it comes to SMEs that prevails in many parts of Microsoft. These organizations that have five to 250 or up to 2,500 users with one or no servers, usually have their own IT department. They forget that most IT implementations are done by Microsoft partners, and they are unaware that in the SME space, IT is usually managed by a service provider. Service providers need a central portal for managing customers. If you run 20+ customer implementations, then do you really want to be constantly logging in and out of the several administration options that Azure has? I’d say you don’t. At the very least, there needs to be a launching point with a rolled up health status for each customer’s subscription that the partner can manage via delegated rights.
If you’ve used Azure for any length of time then you’re used to Microsoft “flighting” new features on a regular basis. On average, I see one change per week in Azure IaaS. My job is weird, because I start every day reading for an hour or two. Few IT pros get time to read regularly, and fewer again ever proactively read. This means that Azure can release the greatest whizz-bang feature in the world, and few will hear about it.
I’m aware of several significant changes to Azure services that have been driven by customer feedback, but few people are aware of it. Why is this? There is no one place to announce these changes. There have been attempts to do this, but what happens is:
- Significant person A wants to announce something on their blog
- Another significant person wants to announce it instead on their blog
- A product group wants to announce it on their blog
- Marketing wants to announce it on their blog instead
- No one bothers announcing it all, some blogger finds it, and muddles out how it works
In the end if you’re like me, then you end up with a huge collection of RSS feeds to identify announcements and even then some slip past you.
The biggest issue, however, is that Microsoft is incapable of telling partners and customers what Azure is and what it can do for them. I have gotten feedback from both locally and abroad that person X has been to a Microsoft event on Azure and returned home none-the-wiser. There’s a lot of, “It’s this big, it’s located in X places, and Gartner/Forrester mumbo jumbo.” There’s very little talk about here’s what you can do with it, and here’s how to price it, which are very important discussions to have.
As I wrote earlier, my job is to sell Azure. I work for a distributor, selling Azure credits to resellers (system integrators, IT services, and consulting companies), who then sell the Azure credits to SMEs to use for their IT deployments. Typically, these partners operate by sending in their sales people or account managers to talk up a service or product and selling it to the customer. Next, the techies go in and implement the product. The sales people usually aren’t good techies, but they know enough to price a product.
Azure is very easy from my perspective. I sell credits with an end customer value in Azure of $100 each. The SME customer via open licensing then consumes services, where each service costs a different amount. A large enterprise with an EA has a cheaper rate, but the structure of the pricing is almost identical. A direct-billing customer doesn’t buy credits up front, but they have the exact same consumption rate as an open customer. The challenge for sales people and customers is understanding how much Azure will cost them per year.
Traditional IT is very easy to budget for:
- I spend X on CAPEX to get stuff running for three to eight years
- And then the outfit pays Y to power and network it
Azure is a very different beast. Let’s take running a set of VMs as an example:
- You need LRS or GRS storage with no easy-to-find description of how storage is measured. And the storage pricing page doesn’t make it obvious to non-techies about the four different kinds of storage is required.
- There is the cost of storage transactions. What are they and how are you to estimate that? I’m not sure why Azure can’t fold that cost into the per-GB cost because the stamp-based design with guaranteed and capped IOPS should allow for it.
- There is the VM cost, which is easy enough to calculate, unless you deploy something from the Marketplace, and this is where things get very messy outside of an EA.
- You will probably need a Gateway for hybrid networking
- And there is the cost of egress data
Backup has the notional concept of an instance plus the cost of blob storage. RemoteApp works on the concept of per-user billing with staring costs, hourly costs, capped costs, with a minimum purchase of 20 users. And on and on it goes.
Almost all of my customer calls are related to Azure pricing. The partner wants to sell Azure to their customer, but when it comes to taking responsibility for a pricing estimate, they feel uncomfortable doing so. Microsoft has made pricing calculators:
- The on-premises analysis tool suffers from The Curse of Zune, supported only in the USA region
- The open and EA pricing calculators present every price, but don’t guide you on which pieces are required or how many are required
Micro-costs such as storage transactions and egress data earn little revenue for Microsoft, but they confuse customers and prevent sales. Concepts such as instances in backup serve only to drive customers away to simpler, more mature and more expensive non-Microsoft alternatives.
Azure’s pricing needs a unified strategy, and it needs to be simplified. I really don’t care what Google or Amazon do because what they sell or don’t sell is their problem. Microsoft is losing business because Azure pricing is too difficult to understand and size.
5. Copy Office 365
Office 365 got a cool reception from the world when it was first launched. They quickly realized that they needed to adapt to what the world wanted. Azure launched as a PaaS-only cloud that was direct-sold to large enterprises and SaaS developers. Times have changed, where the market drove Microsoft to developing IaaS and to releasing Azure to the same customers (SMEs). It took Office 365 three years to get where they are now, offering the right plans and flexibility to all customers. Microsoft might desire wide adoption in Fortune 1000s, but in reality, it’s the more agile and cost-sensitive SME that chose to move to Office 365. And if Microsoft plays their cards right, they’ll get the same results with Azure.
Tagged with licensing