Satya Nadella explained Microsoft’s “secret” weapon against AWS and Google:
To me what matters is having the right mix of SaaS value. I don’t think of my server business as somehow “old school” or “legacy.” I actually think of the server as the edge of my cloud.
We now have the ability to tie together the cloud and the server. That is a very unique capability that we have. So who am I competing with? Amazon has no capability to compete there. They don’t have a server. Nor does Google. Oracle doesn’t have the equivalent capability. So those are the places where we want to really excel.
The reality is that whether you have some sort of a server on-premises or not shouldn’t matter and that is why Google and Amazon are not concerned in the long term – while Microsoft will continue to be a follower in the cloud arena rather than a leader.
Let’s consider what public cloud like AWS has done for the software industry: it dropped the cost of entry for a startup to near zero. Whereas in the past a startup would need to get redundant enterprise-grade Internet connection and build out a server infrastructure, today all they need to do is going to their AWS dashboard and provision a server. The point is, Googles, Amazons of tomorrow are not built on-premises. Startups of today will be the dominant players of tomorrow and they are built in AWS and Google without a care in the world for on-premise IT.
Smart enterprise does not rely on any particular server. I’ve long been advising my employers and customers to not use Java EE servers like IIS, WebLogic or Glassfish, for example, and instead rely on lightweight platforms (Spring and Jetty for Java, Node.js, etc.) Smart enterprises build out enterprise API that make the location of their applications (on-premise or in the cloud) irrelevant to the business. Smart IT departments develop data governannce policies that improve insights while decentralizing data.
The cloud shifted the center of technology management and thought leadership away from enterprise IT departments and CTOs down to individual teams. A team armed with a budget no longer needs to go through red tape and beg their IT department to find a place where to run their applications in a scalable fashion. Just like BYOD disrupted enterprise mobility so does “Bring your own Salesforce”, “Bring your own AWS” and “Bring your own Heroku.” Enterprise IT can help make themseles relevant by not restricting where the applications are hosted and instead offering secure enterprise API accessible as described above, along with data governance and best practice procedures.
An enterprise that owns and productizes their business API and has a sound data governance is not beholden to any particular cloud vendor – not even Microsoft. Traditional vendors will continue to sell their hybrid on-premise/cloud products, but the reality is that they only kick the can down the road and further entrench their influence in your organization. Own your API and data governance and set your enterprise free from the shackles of enterprise IT vendors!