Beyond Binary

Microsoft's Bob Muglia announces Microsoft's Windows Azure plans at last year's professional developer conference. On Tuesday, Microsoft announced how it will charge for the service and what level of guarantees it will provide.

(Credit: Robert Vamosi/CNET News)

Microsoft on Tuesday announced how much it will charge companies that want to use its Windows Azure cloud computing service when it is released in final form this fall.

The software maker announced a variety of plans, including one that charges purely on consumption and another that offers discounted rates for those that agree to a six-month commitment.

With the launch of Azure, Microsoft finds itself in a new type of business, where it competes with the likes of Amazon.com's Amazon Web Services and Salesforce.com's Force.com.

The cloud operating system isn't launching in final form until Microsoft's November Professional Developer Conference, but a top executive had told CNET News that the pricing announcement would be made at this week's Worldwide Partner Conference, which is taking place in New Orleans. Microsoft first announced its Azure plans at last year's PDC and the product has been available as a free technology preview form since then.

On a pure consumption basis, Microsoft said it will charge 12 cents per hour for computing, 15 cents per gigabyte for storage and 10 cents per 10,000 storage transactions. For network bandwidth, the software maker is charging between 10 cents and 15 cents per gigabyte.

The discount plan, dubbed the "development accelerator" comes in two forms and offers a 15 percent to 30 percent discount off the consumption charges. It requires a six-month commitment, with overage charges billed at the regular rates. After six months, the pricing reverts to the standard Azure rates.

Microsoft also announced pricing for its SQL Azure database, charging $9.99 for the basic Web edition, including up to a 1GB relational database and $99.99 for the Business Edition, which includes up to a 10GB database.

The software maker said it would promise 99.95 percent reliability for its compute and connectivity and 99.9 percent for role instance and storage. Ultimately, though, Ray Ozzie has said that trust will play a big role in which company businesses are willing to choose to host their applications.

Correction: An earlier version of this post stated the incorrect time for the Professional Developer Conference. It will take place November 17 to 19 in Los Angeles.

Microsoft said on Wednesday that it has released an update to the developer kit for its Windows Azure cloud-based operating system.

The company said the updated tools fix bugs and speed performance, as well as add better integration with Visual Studio and other tweaks.

Microsoft unveiled Azure and offered up the first community technology preview version of its tools at the Professional Developers Conference in October.

"Microsoft will continue to release updates to the Windows Azure SDK based on feedback from developers," the company said in a statement.

In a December interview, server and tools unit President Bob Muglia said that developers are mostly kicking the tires on Azure right now, but said that some services would go into production later this year.

Ray Ozzie speaking to the PDC crowd at the beginning of his keynote address.

(Credit: Robert Vamosi/CNET News)

At PDC 2008, Ray Ozzie and company on Monday morning talked up Windows Azure, Redmond's new cloud computing effort. Here's how the details unfolded in this live blog of his keynote address. Click here for a recap of the news from the event or here to see all our Professional Developers Conference coverage.

10:12 a.m. PDT: Microsoft didn't go into too many details on how it will charge for Azure, saying it will be free during the preview period. Final pricing, "will be competitive with the marketplace" Ozzie said. Keynote ending now.

Microsoft's Dave Thompson says all of the company's enterprise software will be offered as an online service over time.

(Credit: Robert Vamosi/CNET News)

9:55 a.m. PDT: Microsoft's Dave Thompson is now talking about how Microsoft itself will offer business software that runs over the Internet. Microsoft currently offers its CRM and Exchange software as a hosted option, but that's just the beginning, Thompson said. Over time, "all our enterprise software will be delivered as an online service as an option," Thompson said.

But Thompson stressed that most companies will want a mix of software that runs both on-premise and in outside data centers. The key is to be able to offer both options with no difference to the end user, something that Microsoft has been betting on.

9:45 a.m. PDT: Muglia is demoing how a company will be able to monitor their Azure services using an add-on to Microsoft's System Center management tool, code-named "Atlanta."

Screenshot of the Bluehoo.com dashboard for monitoring service performance.

(Credit: Robert Vamosi/CNET News)

9:43 a.m. PDT: Check out the Azure Web site. Press release is also live here.

9:35 a.m. PDT: Muglia talks about SQL Services--a version of Microsoft's SQL Server database that runs on top of Azure. (Microsoft talked about this at its spring Mix conference, referring to it then as SQL Server Data Services)

Server and Tools senior VP Bob Muglia talks about the benefits to businesses of Windows Azure.

(Credit: Robert Vamosi/CNET News)

9:30 a.m. PDT: Now Server and Tools senior VP Bob Muglia is talking about how Azure applies to businesses. He's highlighting how the core requirements of businesses don't change just because applications are moving from a company's own data center into Microsoft's centers. Businesses still need things like interoperability, security, compliance and management, Muglia said.

9:20 a.m. PDT: A third-party developer is talking about one of the first Azure services, something called BlueHoo that uses Bluetooth to create a sort of social network of people that are in close physical proximity.

Screenshot of Bluehoo.com mobile social networking app built on Windows Azure.

(Credit: Robert Vamosi/CNET News)

Each person is represented by a cute little bug called a "hoo" that represents a person with an active Bluetooth connection. Until they are signed up for the service, their "hoo" is gray. Once they sign up, they can enter profile information and make their character come to life.

At that point your hoo turns pink or blue, depending on your gender," BlueHoo's creator Jonathan Greensted said. (Too bad there's not a purple option).

9:15 a.m. PDT: Don't think I've forgotten about you, dear readers. It's just that the talk has turned rather geeky, with a demo of how to build a cloud application.

Microsoft's Amitabh Srivastava goes over technical details of Azure.

(Credit: Robert Vamosi/CNET News)

9:05 a.m. PDT: Now Amitabh Srivastava is talking more about the technical details of Azure.

Each processor in Microsoft's data center is running its own hypervisor, he said. At the heart of Windows Azure is a "fabric controller" which manages an Azure service throughout its life cycle.

"We have built a platform to allow you to build your killer apps," he said.

8:57 a.m. PDT: Ozzie said that Azure won't run on a company's own servers. "Rather it's a service running on a vast number of machines housed in Microsoft's own data centers."

Slide showing some of the services Microsoft plans to offer on top of Windows Azure.

(Credit: Robert Vamosi/CNET News)

Azure is being released now as a technology preview with a subset of what Microsoft eventually hopes it to be.

Ozzie promises that developing for Windows Azure will build on what developers know, but he also talks about a new storage model as well as a system designed for "scale out" rather than "scale up"

"There are ways that Windows Azure needs to be different," Ozzie said.

8:54 a.m. PDT: Ozzie announces "Windows Azure"--what had been called Windows Cloud.

"Windows Azure is a new Windows offering at the Web tier of computing... what you might think of as Windows in the cloud."

8:45 a.m. PDT: Companies have been doing this, building robust Web sites and trying to build all this capacity with their existing IT infrastructure.

"Doing this is extremely tough," Ozzie said.

While internal needs are roughly constant, Web demand fluctuates considerably, meaning companies need to build to peak demand, resulting in excess capacity. The need for redundancy means companies have to build not just one massive data center, but multiple ones.

8:40 a.m. PDT: Ozzie promises that between now and tomorrow, developers will hear the whole strategy from software to services--and developers will get their hands on all the new stuff as well.

Ozzie's shifting to the strategy, noting that how today most of a company's computing resources are devoted toward building things used by a company's own employees. That's shifting to where businesses are expected to have equally rich tools for customers and partners.

He dubbed this the "externalization of IT."

8:37 a.m. PDT: Ray Ozzie takes the stage, thanks the crowd, and tells them how good it is to finally be able to talk "end to end" about what the company has been working on the last couple of years.

"It's a transformation of our software and a transformation of our strategy," Ozzie said.

8:30 a.m. PDT: Keynote just getting ready to start.

LOS ANGELES--Microsoft on Monday announced a version of Windows that runs over the Internet from inside Microsoft's own data centers.

Dubbed Windows Azure, it's less a replacement for the operating system that runs on one's own PC than it is an alternative for developers, intended to let them write programs that live inside Microsoft's data centers as opposed to on the servers of a given business.

"It's a transformation of our software and a transformation of our strategy," said Ray Ozzie, a computing industry pioneer who now serves as Microsoft's chief software architect. (For a play-by-play account of Ozzie's speech, see "PDC 2008: Windows Azure live blog.")

Ray Ozzie delivers his keynote address at Microsoft's Professional Developers Conference.

(Credit: Robert Vamosi/CNET News)

Microsoft first outlined a shift to "Live Services" at an event in San Francisco in 2005. The company has released a few things piecemeal, such as Live Mesh, but Monday's announcement marked the first real discussion of how Microsoft's disparate Internet strategies fit together.

The announcements come at the start of Microsoft's Professional Developer Conference here. On Tuesday, Microsoft plans to go into more detail on Windows 7, the successor to Windows Vista, due out by about January 2010.

With the launch of Azure, Microsoft will find itself in competition with other providers of Internet storage and computing services including Amazon, Salesforce.com, and Rackspace.

Ozzie said he was tipping his cap to Amazon founder Jeff Bezos for innovating the hosted computing model. Amazon "established a base-level design pattern, architecture models, and business models that we'll all learn from," he said.

Microsoft is making Windows Azure in preview form to developers, with a limited subset of the features that it plans to have in the product before its final release.

There weren't many details on how Microsoft will charge for Azure, saying it will be free during the preview period. Final pricing, Ozzie said, "will be competitive with the marketplace."

The company itself plans to offer businesses the option of running over the Internet the kinds of software that have traditionally run on a company's own servers. Microsoft already sells its Exchange corporate e-mail software in this way, but that is just the beginning, said Microsoft vice president Dave Thompson.

"All our enterprise software will be delivered as an online service as an option," Thompson said.

CNET News' Elinor Mills contributed to this report.

Server and Tools senior VP Bob Muglia talks about the benefits to businesses of Windows Azure.

(Credit: Robert Vamosi/CNET News)

Microsoft's cloud computing team discusses how a common set of tools can be used for developing applications for traditional Windows as well as for Windows Azure.

(Credit: Robert Vamosi/CNET News)

Microsoft's Dave Thompson tells attendees at the Professional Developer Conference that all of the company's enterprise software will be offered as an online service over time.

(Credit: Robert Vamosi/CNET News)

One of the biggest challenges in business software, whether it lives inside a company or is part of a hosted service, is making sure that only properly authorized employees have access to the data and applications. Microsoft discusses how its Federated Identity platform will work with the new hosted services.

(Credit: Robert Vamosi/CNET News)

Amazon said on Wednesday that it plans to offer its cloud computing customers the option of running Microsoft's Windows Server operating system as well as its SQL Server database.

Starting sometime this fall, Amazon said that customers of its EC2 (Elastic Compute Cloud) service will be able to run Windows, in addition to the Unix-based options currently available. Amazon is currently conducting a private beta test of the new Microsoft-based options.

"The ability to run a Windows environment within Amazon EC2 has been one of our most requested features, and we are excited to be able to provide this capability," Amazon said in a blog posting. "Our goal is to support any and all of the programming models, operating systems and database servers that you need for building applications on our cloud computing platform."

The company said that EC2 running Windows Server or SQL Server will be useful for running ASP.NET Web sites, media transcoding and other Windows-based applications.

Microsoft, meanwhile, is expected to talk more about the ability to write applications directly to its Live Mesh service at its Professional Developers Conference, which takes place at the end of this month.

Those who want a glimpse of cloud computing's future might want to check out the work of a little-known Swedish start-up.

Xcerion has a browser-based environment known as icloud that looks a whole lot like a Windows or Linux desktop. There are files, folders, icons, and applications, but the data lives inside the cloud. Although some bristle at the notion of a "cloud OS," because such products inevitably still require a Linux or Windows-based PC, Xcerion's icloud does put all the kinds of things you do in a desktop operating system, running inside a browser window.

That's not to say Xcerion wants to turn PCs into dumb clients. On the contrary. Although the data is synchronized to the cloud, its XML-based programs are downloaded to the PC and run natively, harnessing the power of the desktop as well as its ability to work offline.

It's the kind of thing I expect to see someday from Google, Microsoft, and others. But, for those who don't want for Eric Schmidt or Ray Ozzie to be fully ready with their contenders, Xcerion has brought some of that pie in the sky down to earth.

The company launched a developer beta of icloud in September and hopes to have a public beta by the end of this year.

In getting a demo of its product this week, I saw both good and bad. The good part is that it really shows what's possible in a browser even without Flash or ActiveX. Xcerion also shows off a few really neat features, including one that lets you associate the sides of your icloud window with another user on another PC. To share a document or application, you simply drag it off your screen and onto theirs.

On the not-so-hot side, the applications that Xcerion has created may resemble their Windows counterparts but they are really more examples of what could be than full-featured applications. The icloud environment is also painfully slow to load for folks in the U.S. and Asia. Chief Executive Daniel Arthursson said that it runs much faster in Europe, particularly in Sweden and that a content delivery network is coming online later this month that should speed things up for folks here.

As for the applications, icloud is making the source code available so developers can write their own programs that go further. Indeed, that's where the company hopes to make its money, giving away icloud and making money by taking a 10 percent cut on icloud applications created by third parties, as well as potentially on premium features like extra storage. For now, individual users get 500MB of free storage from Xcerion.

Competitors in the cloud
It's important to keep in mind that Xcerion is far from alone in this effort. There are plenty of other "cloud operating systems" like YouOS and the Laszlo Webtop out there, along with many other Web-based application environments that don't say they are aspiring to be operating systems. Salesforce.com has its development environment for business applications, while consumer sites like Facebook and other social-networking sites are also aiming for developers.

Plus there are the big boys like Microsoft and Google.

Google has a whole lot of applications that live in the cloud, including Gmail, its Office-compatible Google Docs and Spreadsheets, and Gtalk. Microsoft also has a number of mail and messaging products as well as document collaboration, file storage and other cloud-based computing projects.

Microsoft has talked a great deal about bringing a more fundamental layer of services into the cloud, although it has thus far been somewhat vague on the details.

Xcerion, meanwhile, is tiny, with 30 employees. The company has been plugging away since 2001. It raised $12.5 million in December 2006 with former Microsoft Chief Financial Officer John Connors and former Microsoft engineer Lou Perazzoli among its angel investors.

While I questioned Arthursson about the company's ability to bring such a broad vision to reality on its own, he rejected the notion that its only option was to sell itself.

"We've already been approached," he said. "We really want to see this to the end user."

Arthursson said he's counting on things like icloud's open-source approach to help it compete against a crowded field.

"If we can connect to our users, I think we have a shot, even though there are larger companies (out there)," Arthursson said.

On its Web site seeking beta users, the company boldly states: "Xcerion aims to sign up millions of users with its offer of inexpensive or downright free software," But Arthursson said, he knows that without a big marketing budget, it will be tough to get that large user base.

"We have a technology that stands up really well," he said. "It's all about connecting to the users, and getting the eyeballs, and giving us some time to add all the features that users expect," he said. And he is banking on the fact that Xcerion's effort is further along than Microsoft's.

"When they have a desktop, we will have 50 applications," he said.