Microsoft to Jump on Board EC2

Dietrich Kappe, Thursday, October 2, 2008 @ 12:57 pm

Hold on to your hats; Microsoft has just made a radical change in business model. A couple of months ago I wrote about the competitive advantage that firms using Linux and Amazon's EC2 cloud computing had over their competitors.

Server-on-demand providers like Amazon's EC2, Joyent,
and others have reduced the capital necessary to launch scalable,
server intensive businesses. Google has just launched a similar
on-demand service, and companies like RightScale and CohesiveFT are building mature businesses around managing EC2 configurations.

...

Facebook applications are just the most extreme example of business initiatives that can be scaled on demand from $70/month on one EC2 server to $10,000/month on many dozens of servers running web, application and database server clusters and farms. Compare that with the old school of investing in a large data center with a significant fraction of the hardware and bandwidth that you might need if your business is a success. What used to cost $100k in capital can now be done with just a few hundreds of dollars.

...

And it's all possible as long as you are using a unix variant - Linux for the most part - to power your apps. So there is a whole class of companies out there using Linux that can out compete their Windows-using rivals - again, the capital they need to launch is much smaller because of cloud computing. That means Linux will win among the class of young entrepreneurial businesses that are so vital to the US economy.

It seems that Microsoft has spotted this gaping vulnerability and is seeking to close it. From the Amazon announcement on support for Windows on EC2:

Starting later this Fall, Amazon Elastic Compute Cloud (Amazon EC2) will offer you the ability to run Microsoft Windows Server or Microsoft SQL Server.

...

Customers will only pay for as much or little as they actually use; of course the actual price will be higher than Linux-based instances, due to the cost of Windows licenses. We’ll announce specific pricing when we make the service broadly available later this Fall.

Combine this with the announcement earlier this month that you could officially run Oracle on EC2 (though you still have to license it rather than pay as you go), and it's clear that commercial software vendors are feeling the preasure of SaaCS (Software as a Commodity Service).

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Comments: 1 so far

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1. 

   In my opinion tt’s a great news. Clients will have more options.

   Comment by Seban, Friday, October 3, 2008 @ 2:20 am

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