Microsoft won't allow businesses to run locally hosted versions of its forthcoming Windows Azure cloud operating system.

"We don't envision something on our price list called 'Windows Azure' that is sold for on-premises deployment," wrote Microsoft senior product manager Steven Martin, in a blog post Tuesday.

"Some implementation details aren't going to be practical for customers, such as our global data-center hardware design and large scale multi-tenancy features which are integral to Windows Azure and the Azure services platform," wrote Martin.

Martin additionally said Microsoft wants to maintain the ability to tweak Azure on the fly and deliver a consistent experience to all users. Maintaining control of Azure also allows Microsoft to maximize hosting revenue generated by the product.

Microsoft unveiled Azure in October. The software and services platform is a key part of a strategy that sees the company lessening its emphasis on the desktop and shifting more resources to Web-based offerings that can match Google's growing portfolio of online products.

At its heart, Azure is designed to allow developers to create so-called cloud-based computing architectures that run off of centralized servers operated and maintained by Microsoft.

"We have introduced a game-changing set of technologies that will bring new opportunities to Web developers and business developers alike," said Ray Ozzie, Microsoft's chief software architect, at an Azure launch event last year.

Azure encompasses a range of new and existing Microsoft technologies, including SQL Services, .Net Services, and Live Services. At its core is a version of the Windows operating system specifically designed for hosted, or cloud, environments. The OS is fully integrated with the Visual Studio development toolset.

An increasing number of organizations are eyeing hosted software in order to reduce complexity and cut administrative costs. Washington, D.C., for instance, recently moved its business applications to Google's online Google Apps platform. Microsoft needs to get in on the action. Sales of its earthbound Windows OS fell 8% in the most recent quarter.

The concern with cloud environments, however, is that access to key systems can be lost if the service goes down. Azure, which Microsoft is currently testing before it makes the offering formally available later this year, experienced its first major outage over the past weekend in an event that the software maker blamed on a routine upgrade. Late last year, some users of Google's hosted Gmail service were unable to access e-mail for more than 24 hours.

To help ensure Azure's uptime, Microsoft is employing what it calls the Windows Azure Fabric Controller technology. Azure Fabric is designed to balance workloads across servers, manage resources, and reroute work instantaneously if a server goes down, according to Microsoft.

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