Cloud Hosting

Microsoft isnt banking on snazzy marketing or technical chops alone to make its Azure service a winner in the critical cloud-computing market. Its also offering freebies, betting that discounts and free technical support today will produce paying customers down the line.

DefinedCrowd, a Seattle software startup, had a choice to make when it was developing its first product last year build on the cloud-computing foundation offered by the dominant Amazon.com, or Microsofts upstart competitor?

For founder Daniela Braga, the competing services seemed about even in terms of features. On price, Amazons tools were a bit cheaper than Microsofts. And more developers were comfortable working with Amazon Web Services (AWS), the cloud-computing pioneer and now the markets largest player.

But Microsoft held the trump card: an offer of $500,000 in credits to spend on Microsofts Azure cloud services over three years, a benefit DefinedCrowd had earned by participating in a Microsoft startup program. That kind of sum can pay for the entire technology-infrastructure cost of getting a software companys first products off the ground.

That was kind of hard to refuse, said Aya Zook, business-development manager with DefinedCrowd, which makes tools to train software how to recognize speech or images.

The startup would build its software on Microsofts Azure.

Microsoft has staked its future on the cloud, the range of on-demand computing power and software services bundled into Azure and other products.

But Microsoft isnt banking on snazzy marketing or technical chops alone to make Azure a winner. The technology giant is also offering bargains and freebies, including discounts to large businesses, free trial offers to all comers, and grants of cash for startups and nonprofits that try the service.

The programs are part of a broader, companywide effort to gain market share. The bet is that discounts and free technical support today will make paying customers down the line, ideally bringing thousands of dollars a year to Azure and boosting awareness of Microsofts offering in a highly competitive market.

Its an old tactic for a company that has long had plenty of cash to work with. Exactly where Microsoft has deployed that money to lure software developers offers a window into the companys shifting priorities over the years.

In the midst of its unsuccessful smartphone push a few years ago, Microsoft was shelling out a reported $100,000 (and up) to application makers who built tools for Windows Phone. Before that, Microsoft made similar deals to get developers and corporate partners interested in Bing, the fledgling search engine. And to a generation of technologists years ago, Microsoft offered ample support to get businesses to plug into the new Windows Server.

Those programs have yielded mixed results, said Michael Cherry, who worked at Microsoft in the late 1990s, and today tracks the company with analysis firm Directions on Microsoft.

Grants to use products dont tend to make a big difference on their own, he said. But when you can add feet on the ground to help a developer that had a problem? Theyll be loyal to you forever.

For Microsoft, the cloud is the priority today.

It was the focus of the companys recent Build developer show in Seattle, where the company kicked off the proceedings by staking out a virtual claim to the city, and the market.

A promotional video showed the Space Needle topped by a flag with the Microsoft logo on one side, and Cloud City on the other. Never mind that Amazon, with a much bigger cloud-market share than Redmond-based Microsoft, has its headquarters just a few blocks away from the landmark.

When choosing between Amazon and Microsoft, Braga concedes she had a soft spot for Microsoft. A linguist and speech-software expert originally from Portugal, she had spent seven years at the company. Zook, her colleague, is a fellow Microsoft alum.

Were ex-Microsoft people, she said. Its an environment that were comfortable with.

Still, she said, There are a lot of incentives, and pressure, to go on AWS.

Amazon, which pioneered the business of selling software and developer tools delivered over the internet, built its lead in that market, in part, by touting an easy-to-use product that offered room to experiment without paying. Adding to the appeal, technologists say, was the absence of complex, negotiated software-licensing deals of the sort Microsoft relies on.

A free tier of AWS services, introduced in 2010, can add up to thousands of dollars a year, a benefit available to all customers regardless of size. The company has bolstered that in recent years with credits aimed at researchers and educators, as well as standard startup grants ranging from $15,000 to $100,000.

The combination, on top of a technologically impressive set of products, has given AWS an enviable list of customers at the cutting edge of technology, including Netflix, Airbnb and Slack.

To counter AWS lead, No. 2 Microsoft has brought to bear what some see as its greatest asset: a giant base of corporate customers, and a sales force of tens of thousands built to sell to them.

In contract talks with corporate customers of Windows, Office and other software, Microsoft recently has been offering discounts on those products in exchange for a commitment to buy thousands of dollars worth of Azure cloud-computing services, according to consultants who advise those companies.

The company has also lent customers its own engineers.

Mojio, a Vancouver, B.C.-based software maker, participated in a Microsoft program called BizSpark, essentially a boot camp for technology startups eager for Microsofts counsel and connections. The program comes with complimentary Microsoft software, and, in the last two years, up to $120,000 in cash to use on Azure over two years (though some companies, including Mojio, have received larger grants).

Mojio, which builds software for connected cars, had just about run out of free Azure credits when it caught its big break: a deal with wireless carrier T-Mobile.

Mojio signed on to supply some of the technology behind the Bellevue companys new car-mounted Wi-Fi hot spot and diagnostic data gathering tool. The product went live the Friday before Thanksgiving.

By Monday, Mojio was in crisis mode.

The stream of data being thrown off by the hot spots and into Mojios systems built on Microsofts Azure pushed them to the breaking point. So many customers were using the tools that the software built to digest it slowed to a crawl.

It wasnt clear whether it was an architecture issue, whether it was a bug, said Mojio chief executive Kenny Hawk. The volume came faster than any of us had predicted.

Hawk, worried that he was watching his startup implode, called in a big favor.

A friend, a former Microsoft board member whom he declined to name, agreed to put in a call to Microsoft Chief Executive Satya Nadella, asking for help on behalf of tiny Mojio, which then employed fewer than 15 people.

Literally within a couple hours there were (Microsoft) people working on it, Hawk said.

The next day, Microsoft engineers arrived in Vancouver. They would work side-by-side with Mojios staff for the next three days to retool the software to handle a larger workload.

Hawk is grateful for the help, but has no illusions: Microsoft isnt a charity.

The company, he says, is probably hopeful that Mojio, which outgrew its free allotment of Microsoft tools, would eventually become a major buyer of them.

It wasnt just that we were nice people, or that wed been a part of BizSpark, Hawk said. They see how big the connected car market will be. Having a core customer in that space is strategic.

Corey Sanders, who leads a Microsoft team building Azure infrastructure services that compete with Amazon, wasnt involved with the Mojio rescue and hadnt heard the story. Still, the scale of Microsofts response didnt surprise him.

In the competitive cloud market, every customer matters, he said. Every product is critical.

More here:
Microsoft's weapon in high-stakes cloud-computing battle with Amazon? Freebies - The Seattle Times

Cray is now offering its Urika-GX supercomputer for rent. One of the last HPC system vendors to give cloud computing a whirl, the companys initial foray into supercomputer-as-a-service will target life science customers looking for compute cycles on something more sophisticated than a traditional cluster.

To make its cloud business fly, Cray is partnering with Markley, a cloud infrastructure provider based in Boston, Massachusetts. Markley is a fairly typical cloud company, offering services like collocation, utility storage, disaster recovery, and so on. The company promises 100 percent uptime.

Crays entrance into the cloud came about as a result of a beta trial of the Urika-GX supercomputer by a research institute located outside of Boston. According to Ted Slater, who heads up the healthcare and life sciences unit at Cray, genomic researchers there were doing variant analysis, studying cell mutations associated with disease. Identifying those mutations can often lead to effective diagnosis and treatments.

Slater says the researchers were able to realize a five-fold speed-up on their variant analysis runs, compared to the HPC clusters they were using. That allowed them to analyze more data and ask more interesting questions. In fact, the faster turn-around time sped up the whole workflow, including software development of the genomic codes.

Its not too surprising that a Urika-GX could outrun a conventional HPC cluster, given its customized design, in particular, its use of the Aries interconnect to speed inter-node communications. Its also important to know that Urika-GX is an extremely flexible platform for analytics, says Slater.

The system comes with a complete software stack tuned for analytics applications, especially graph analytics. That includes the low-level Cray Graph Engine, a popular statistical programming languages in R, and distributed programming frameworks, like Hadoop and Spark. Application libraries can be added as needed.

Thanks to the five-fold performance improvement, the research institute was sold on the Urika-GX, but they preferred to rent rather than buy. After all, says Fred Kohout, Crays senior vice president of products and chief marketing officer, who wouldnt want to use a Cray?

Although the cloud offering will initially be confined to the Urika-GX system and life science types, Kohout says theyre already considering ways to expand the business. Were going to continue to look at other industries and other parts of the Cray portfolio as they make sense, says Kohout. And well roll those out in the months ahead.

If you happen to be attending the Bio-IT World Conference and Expo in Boston this week (May 23-25), Cray and Markley will be on hand to talk about their cloud computing venture. If you miss the event, the two companies will be conducting a live webinar on the new service on June 13th at 10:00 am PDT. You can register for it here.

Read more:
Cray Takes the Plunge into Cloud Computing - TOP500 News