Microsoft is announcing on Monday that it plans to let businesses and partners run Windows Azure in their own data centers by purchasing a new server appliance.
The software company had previously hinted that customers might someday be able to host their own instances of the cloud-based operating system, but had yet to commit to that option.
The Windows Azure Platform Appliance will be made up of hundreds of servers, along with networking gear and other components in a container-size package. HP, Dell, and Fujitsu will be among the first to sell the appliances, although Redmond is offering few details, such as how much the appliances will cost or when they will be available.
Initially the three hardware makers will be installing the Azure appliance in their data centers and providing service to customers, although the plan is to also allow each company to make hardware that they could sell to individual businesses.
The Azure appliance is being outlined Monday as part of a series of announcements timed for the start of Microsoft's Worldwide Partner Conference in Washington, D.C. The company is also announcing the betas of the first service pack for Windows 7 and Windows Server 2008 R2 as well as pricing and a new beta for Windows Intune.
Windows Azure was first outlined at Microsoft's Professional Developer Conference in 2008, and Microsoft started charging for the product at the beginning of this year. It now has 10,000 paying customers, all running their applications from Microsoft's data centers.
As for the Azure appliance, Microsoft says it is too soon to offer many details, but said the option should appeal to businesses and partners that want the benefits of Azure but need physical control of their data for regulatory or other reasons.
Dell, whose servers are widely used inside Microsoft's Azure data centers, said it hopes to have an appliance up and running in its facilities by the end of its fiscal year, which runs through January. Selling Azure appliances to other companies will probably take more time.
"The real volume sales will not be until at least 12 months out probably," said Kris Fitzgerald, chief technology officer of Dell Services.
Fitzgerald said that the companies are still working to figure out what form the appliance will take. For some customers, a fully equipped container might make sense, he said, but added that other companies may not have the kind of open space that would allow for that and might need something that fits in traditional racks. Either way, the minimum size will be in the hundreds of servers, he said. The ultimate price will depend on what form the appliance takes.
Having an appliance option could ease the transition for companies that are interested in the cloud, but aren't ready to hand over all of their data, he said.
Among the earliest corporate customers for the appliance is eBay, which already uses the public Azure cloud to power the iPad version of its Web site.
James Barrese, vice president of technology for eBay, said his company hopes to get the first appliance up and running before the end of the year. Initially, Barrese said eBay will use the internal Azure cloud to run new applications, but over a period of years the company hopes to move both core data and applications to an internal instance of Azure.
One of the challenges is that, although eBay uses the Windows OS, its applications are Java-based. Barrese said that there is a commitment on the part of Microsoft to make sure that Java can run as a first-class citizen on Azure. Though some of that work has been done, Barrese said more is still to come to make it a reality.
"It's going to take work," he said, but added that having eBay as an early user will make sure that work gets done. "There's nothing like a very demanding customer that's working at extremely high volume. There definitely are investments that Microsoft is going to make."