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Global CIO: What Microsoft Must Do After Blockbuster eBay Deal

Now it must convince average companies why they need private cloud computing.
eBay is already speaking to the business need it sees in private clouds. In an interview with InformationWeek's Charles Babcock, eBay VP of technology James Barrese says:

"This offers scalability, efficiency, the ability to rapidly respond to changing situations," he said. The number one reason to implement a cloud appliance is for "internal agility," although Microsoft is saying the ability to manage large numbers of Azure platform appliances will lead to cost savings as well. "I could build it myself, but I don't want to," continued Barrese. "I can focus my engineering effort of a better experience for buyers and sellers."

IT leaders are increasingly focused on speed and agility as weak spots in their operations. Improving that could become a key selling point for private clouds.

eBay won't answer one key question businesses have about private clouds: whether the typical enterprise data center, running nowhere near the scale of an eBay, can get the economies of scale needed to make the spending on a private cloud pay off.

Another key element to watch is how quickly Microsoft builds eBay's demands into its Azure appliances. eBay is being touted as basically a co-developer of this appliance. Writes Babcock:

[eBay] was looking toward its next generation infrastructure and showed Microsoft its blueprint for future high volume, scalable operations. EBay in the past has built up its own data centers. But it was seeking greater automation of pooled resources, greater ease of maintaining security and easier administration of users. "We asked, do we want to build this ourselves or partner with somebody who can do it," said Barrese in an interview. "We see Azure appliances as being able to scale out very quickly," he said.

Cloud computing is a work in progress, in terms of giving businesses what they need for large-scale adoption. When my colleagues and I met with Microsoft's leadership team this May in Redmond, the biggest surprise was how bluntly they admitted this. Microsoft President Bob Muglia compared it to the early days of rolling out and refining Windows NT, and said the big challenge is getting the work done "that's so obviously in front of us all." Microsoft is reacting to customers who are doing pilot protects and "making it very clear to us what we need to do." Said Muglia:

"At the moment the issue has nothing to do with getting people interested, or showing them the advantages. [Companies' developers say] 'I was building an application on Azure, and I tried to do this and I don't have this feature.' We say 'yeah, you don't.'"

Getting eBay to test drive its Azure appliances is a blockbuster deal for Microsoft. Yet it's also a perfect symbol for how companies feel about private cloud computing today. They're eager to test its limits and are excited about the prospects. But what's really interesting is what comes next.

Global CIO small globe Chris Murphy is editor of InformationWeek.

To find out more about Chris Murphy, please visit his page.

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