Today’s keynote at World Hosting Days (held at about midnight Redmond time at Europa Park in southern Germany) capped a great two days of meetings with the Hosters and tech leaders who are leading the industry with their cloud-based solutions.

Regular readers of this blog might be thinking to themselves why a VP of engineering at Microsoft is at a Hosting conference?  The reason is really simple and really important:  Right now we are seeing the largest growth in purchases of new x86 servers coming from Hosters. These hosting partners are seeing tremendous demand for their services/capacity as organizations around the world move into a Hybrid Cloud model.

One of the topics my keynote touched on in detail was the principle of the “Virtuous Cycle” of the cloud – something I’ve written about before here.

This virtuous cycle is something that only Microsoft is delivering in a complete, holistic way.  Our approach to this cycle is something that Hosters understand better than anyone – they understand the challenges of deploying, maintaining, and growing a shared cloud platform + services, as well as the constant need to innovate and drive efficiencies.  This cycle, and the Hybrid Cloud approach that enables it, is incredibly exciting and it’s something that Microsoft alone enables – AWS can’t support this because it lacks a viable on-prem solution, and VMware falls short because it doesn’t have a public cloud option.  This means that Microsoft is uniquely positioned as the premiere partner for Hosters all over the world. Microsoft is currently the only organization delivering everything that we learn from our own hyper-scale experiences and providing it for the rest of the industry to use.

This virtuous cycle, based on our Cloud OS approach and built on Azure, delivers three critical things:

  • Hyper Scale which delivers lower costs and greater agility.
  • Enterprise Grade capabilities which translates to greater confidence.
  • Hybrid integration and consistency which means you avoid lock-in and get more flexibility.

Microsoft is committed to providing the technology and tools that enable Hosters to expand their service offerings, grow their business, and better serve their growing customer base.

Looking at the market, there are a number of growth drivers that we are watching, and at Microsoft we have begun to structure key sections of our engineering, sales, and marketing teams to develop products and initiatives which proactively address the requirements and opportunities that support the Hoster market.

In particular, there are three specific areas where we currently see the strongest revenue growth:

  1. Infrastructure
    Our latest products are resonating well with Hosters, and we see an increasing number of partners endorsing Microsoft technologies to develop the cloud fabric (virtualization of resources, automation of their provisioning). 
  2. Hosted DB or DBaaS
    Based on SQL, this brings the largest contribution in revenue to our business growth – and still accelerating.  To put the value in perspective, DBaaS solutions serve two scenarios:
    • It extends the lifecycle of existing LOB applications which are moving from on-prem to hosted IaaS, and it offers a lower cost of ownership. Hosters are proving the ability to capture those application and support the migration to the datacenter.
    • It supports the development of a new class of modern app design for cloud.  This is seen in the evolving business model of ISV’s who are moving from software to SaaS.
  3. Hosted desktop
    With an increasing number/variety of devices which IT teams need to support, compounded by the increasing mobility requirement of professionals, end-users are increasingly interested in Hosted Desktop solutions.  These solutions are expected to maintain security, identity, and compliance across company applications that are centrally hosted and accessible via a Remote Desktop Service. Microsoft Hosters are currently managing more than 2.3 million hosted desktop users – a business that is growing rapidly.

One final note from today’s event:  I want to reemphasize the commitments I made on-stage to the World Hosting Days audience:

First, Microsoft’s commitment to innovation.  Hosters are going to see this innovation in two key ways:  Cloud-first design and optimizing for Hosters.

Second, Microsoft is committed to openness with the Hoster community.  This openness can already be spotted in a lot of important areas:

  • On January 28th we announced that Microsoft joined the Open Compute Project (OCP) and we’re contributing the Microsoft Cloud Server specification to the community.
  • We continue to contribute additional Linux distribution support.  Over the last year, no other organization has contributed more content to the Linux community than Microsoft.
  • We will continue adding to the Window Azure Pack with gallery items, languages, and frameworks.
  • We will continue our active participation with Open Daylight and the Open Network Summit.  To see this in action, visit the Microsoft booth at the summit – you’ll be surprised.
  • You can read more about this in an earlier post entitled, Enabling Open Source Software.

Thanks again to the organizers of World Hosting Days for the invite!  This event and this section of the IT industry are driving innovation and using technology in ways that everyone can learn from.