Microsoft plans to bolster Windows Azure in the coming months as it looks to fill gaps in the cloud OS. Redmond's goal: to make Azure a more compelling environment for mission-critical enterprise applications and services while reducing migration hassles.

Observers suggest the changes will go so far as to move Azure from platform as a service (PaaS) into a more comprehensive infrastructure as a service (IaaS) play, a market where Amazon dominates with Amazon Web Services. PaaS typically offers users and developers a plug-and-play environment for apps, but key choices, like underlying OS and database, are limited. IaaS provides raw computing power, and users get more choices, but also more responsibilities.

Microsoft is reportedly making changes to the way Azure implements virtual machines (VMs) so that it can accommodate a wider variety of software--even Linux, which could run on top of Azure in a VM. Azure's present VM role is extremely limited by the fact that it does not offer a persistent state, meaning that data is lost in the event of a reboot, failover, or other interruption.

The addition of a so-called persistent VM to Azure, which would effectively create a hypervisor in the sky, means businesses could in theory upload VMs running Linux, SharePoint, SQL Server, or other "stateful" applications. Microsoft is said to be preparing a Community Technology Preview (CTP) of such features that could roll out soon. Company officials wouldn't comment.

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Benjamin Day, principal at Benjamin Day Consulting in Boston and a Microsoft MVP, told me that he is "extremely confident" that Azure will gain persistent VM capabilities, although he is not certain when. "It is killer and it's going to be really valuable," Day said. "The fact that it has not been available has been just awful, because the Amazon platform has done it for years."

Day said the technology would allow businesses to upload virtually any job or application they are running in Hyper-V in Windows Server to Azure, making the service a more practical and potentially less costly option for many organizations. "This is where Azure has to go to be competitive," he said.

Microsoft, and this is confirmed, is also rolling out a CTP of Apache Hadoop for Azure. The idea is to make Azure a service that can handle so-called Big Data--large data sets that businesses collect from everything from call centers to electronic smart sensors embedded in their products.

The company has added tools atop Hadoop that allow users to set up and configure the framework on Azure "in a few hours instead of days" according to Val Fontama, the company's senior product manager for SQL Server, in a blog post.

Microsoft has also added JavaScript libraries that let programmers write JavaScript programs for MapReduce, the Google-inspired distributed computing framework that's at the foundation of Hadoop, and access them on Azure through a browser. The idea is to make JavaScript "a first-class programming language in Hadoop," said Fontama.

"These improvements reduce the barrier to entry by enabling customers to easily deploy and explore Hadoop on Windows," said Fontama. The Hadoop-on-Azure CTP will also offer an add-in for Hive, which layers data warehousing capabilities onto Hadoop. That will give users a way to interact with Hadoop data through Excel and Microsoft business intelligence tools. For programmers unfamiliar with the Hadoop environment, Microsoft has conveniently added its Metro interface, borrowed from Windows Phone and Windows 8, over Hadoop tools.

Azure, launched two years ago, is key to Microsoft's cloud strategy, but the company is cagey about how many business customers it's attracting. To be sure, there are some high-profile wins like Boeing, Toyota, and Fujitsu, but Redmond won't say how many users Azure has in total, nor does it break out revenue for the service. Customer fees vary depending on the amount of compute and storage resources consumed.

With the changes coming to Azure in 2012, Microsoft "wants to make sure you have no excuses for avoiding their platform," Day said. Amazon, which says it's got 20,000 active customers on AWS CloudFront, should take notice.

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