Microsoft introduced Azure Stack in early 2016 as an extension of the Azure public cloud into the enterprise data center. Amazon Web Services followed two years later with an announcement of AWS Outposts. Both aim to attract enterprise application workloads to their cloud platforms by delivering their own styles of cloud services to on-premises computing environments. But both vendors have taken very different paths to get there. Now, three and a half years after Azure Stack was introduced, it is time to assess this strategy.
Azure chose to enlist the help of well-known data center infrastructure partners including Dell, HPE and Lenovo. They were tasked with racking-up server, networking and storage “stacks” that would run a limited version of Azure’s cloud services software on a data center-resident appliance. Each vendor built configurations to Azure specifications using their own kit which was then tested and validated by Azure. Each of these partners were then to deliver, install and support their own Azure Stacks. Today, there are seven partners – Avenade, Cisco, Dell, Fujitsu, HPE, Lenovo and Wortman AG – and the offering has been renamed to Azure Stack Hub (more on the name change as we go along).
Rather than try to recruit the same partners to sell a competing Outposts appliance, AWS took the unprecedented step of carving out a piece of the AWS cloud infrastructure stack and dropping it on the raised floor of the customer’s data center. With Outposts, the customer is offered a limited set of AWS services, running on AWS kit, all supported and managed by AWS. The customer pays one bill for services that mimic those they can get in Amazon’s public cloud without having to choose a third-party infrastructure partner for services delivery.
Today, Azure’s on premises Hub appliance is still hobbled by limitations. The software development kit (SDK) is still an evaluation version. Unlike Azure public cloud, Kubernetes support on Hub requires the use of a specialized Azure Kubernetes Engine that users have reported takes days to configure. A list of challenges comes with creating and using VMs on Hub including the fact that Generation 1 VMs are only supported on the appliance and cannot be changed to the Generation 2 VMs that are supported in Azure. And, unlike Azure, Hub’s storage environment presents another list of challenges. File storage is either not yet supported or requires an offering from one of the partners. Nor is snapshot copy or storage tiers. Azure Active Directory for storage is still missing. And the list goes on.
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As a result, enterprise Azure users I’ve spoken to who were originally interested in Azure Stack, put it on the shelf while they awaited updates. At least one major Azure Stack partner reports that Hub has not done well in the marketplace.
Did Microsoft conclude that an HCI appliance bearing the same Azure Stack branding would be easier to support and therefore get better traction as an on-ramp to Azure public cloud services by both customers and partners? Partnering for infrastructure to instantiate Hubs in the enterprise data center essentially results in seven different versions of Hub. Yes, all partners deliver Azure cloud services on Hub, but each does so in their own proprietary ways. Doing it this way forces Microsoft to continually manage a validation process across seven different vendor-specific platforms. None of this complexity exists with AWS Outposts.
At the same time that Hub is in the marketplace, Microsoft has chosen to offer a hyper-converged infrastructure (HCI) appliance bearing the same Azure Stack branding. It does not bring Azure services into a customer’s data center. In fact, it takes the opposite approach of extending a customer’s on-premises computing environment into Azure. As an on-ramp to Azure from the enterprise data center, users and partners may conclude that Azure Stack HCI is the better pathway. And Microsoft may conclude that the HCI version of Azure Stack accomplishes the same purpose. In the meantime, a VMware Cloud on AWS version of Outposts is expected to be available later this year as AWS continues to add services while expanding its worldwide availability and customer base.
Which vendor took the right path? Too soon to tell. While Hub has been out and about in the marketplace for three years, Outposts have only been generally available since December of last year. And it is worth pondering whether or not this Trojan Horse strategy will even get enough traction with enterprise users to make it worth the continuing investment in support. I say Trojan Horse because both cloud vendors will always offer subsets of their services to on premises buyers via these extensions of their data centers, and they will be luring enterprise workloads into their clouds for the foreseeable future. Hubs and Outposts are another way to propagate this strategy.