IoT gives Microsoft opportunity for cloud leadership

Microsoft Azure offers an end-to-end portfolio for IoT, and its biggest opportunity is in enterprise IT.

IoT gives Microsoft opportunity for cloud leadership
Thinkstock/Microsoft

Next month, Microsoft will hold its Ignite and Envision conferences in Orlando, Florida. Ignite is aimed at enterprise IT professionals, and Envision is aimed at IT decision makers. 

Combining Ignite and Envision in the same venue increases the overall enterprise IT audience, so expect several enterprise-related announcements. The action will be in the cloud, as Microsoft has become cloud obsessed. Last month’s quarterly results put Microsoft as the second largest cloud company behind Amazon Web Services (AWS) — and growing faster.

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Microsoft deserves a lot of credit for such a strong pivot. Not long ago, the company was all about licensing Windows and other software products. It began its expansion from software products to cloud services when it launched Azure in 2010. Office 365 came soon after in 2011.

However, the cloud-first pivot did not become evident until 2014, after Satya Nadella was named CEO. Last month, Microsoft revealed a cloud run rate of $18.9 billion. That includes Azure PaaS services and Office 365.

We can thank AWS for inspiring Azure, and we can thank Google G-Suite for inspiring Office 365.

IoT provides Microsoft with the unusual opportunity of cloud leadership. Microsoft has been selling Office since Henry Ford built the first PC via an assembly line. PaaS is newer, but the service similarities between AWS, Azure and Google Cloud share more commonalities than differences.

Microsoft and AWS have similar approaches to IoT. Both companies have developed end-to-end solutions, but neither has emerged as the clear leader. IoT is just a small portion of the expected topics that will be covered at these conferences. On the agendas, Ignite has 16 sessions on the Internet of Things (IoT) and Envision has numerous IoT-inspired topics, such as precision farming, digital manufacturing and reimagining retail.

The Azure IoT solution stack

Microsoft has created an end-to-end portfolio for IoT initiatives that help enterprise customers overcome many of the barriers associated with IoT adoption and success. Specifically, Microsoft’s IoT solution stack addresses concerns around time and cost to start, system incompatibilities, scalability, and security. Here’s how:

Set-up time and costs: Azure has launched several services to simplify starting IoT initiatives, namely Azure IoT Suite (in 2015) and Azure IoT Central (last April). Azure IoT Suite is a pay-as-you-go IoT-optimized PaaS that offers pre-configured templates for common IoT scenarios, such as monitoring and predictive maintenance. Azure IoT Central uses a SaaS model for IoT services. By hiding IoT service complexities, it reduces the required skills to get started.

Compatible infrastructure: Getting systems to talk to each other, especially lightweight remote systems, can be challenging. Microsoft offers devices and operating systems (Windows 10 IoT), intelligent connectivity (Azure IoT Hub and IoT Edge), insights and analytics (Azure Stream Analytics and Power BI), and intelligent actions (Azure Notification Hub and Machine Learning) — all designed to interoperate.

Scalability: While there’s no shortage of IoT frameworks and services, few can match the scalability capabilities of Azure. Microsoft has been rapidly expanding its global data center footprint, which serves Azure, Office 365 and Dynamics 365. It recently beat Amazon and Google into Africa and now boasts 40 cloud regions around the world. While AWS still leads in cloud revenue, Microsoft is growing faster and clearly sees a significant opportunity. Microsoft is investing billions of dollars in data center construction. CEO Nadella previously described his data center vision as a “global, hyperscale cloud.” These data centers are further extended with an extensive content delivery network managed by Verizon and Akamai.

Security: Security is, or at least should be, the number one concern with IoT-related projects. It’s a complex and rapidly evolving area that carries huge financial, legal and reputational risks. Microsoft Azure offers several security programs, including continuous intrusion detection and prevention, regular penetration testing, multi-factor authentication, and the option of data residency control. The Azure IoT platform uses SDL and OSA processes for secure development and operation of Microsoft software. The Security Program for Azure IoT offers security audits on customer IoT solutions.

Microsoft has created a portfolio that spans across development, implementation and management. IoT is seeing aggressive growth, but mostly in specialized segments such as industrial equipment. The wave of general enterprise IT plays is still coming, and that aligns nicely with Microsoft's strengths.

AWS is a powerful competitor that addresses these areas in a similar but different way. However, Microsoft has a clear advantage regarding its broader portfolio, especially if the customer intends to integrate IoT data with Office 365 services. And that group, enterprise IT professionals, will be in Orlando at Ignite.

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