How Microsoft's $15 billion cloud bet ended up at the center of the company

Mark russinovich microsoft azure ctoMicrosoftMicrosoft Azure CTO Mark Russinovich

Microsoft likes to trot out the stat that it’s invested $US15 billion in building out Azure, its cloud computing product where you swipe a credit card and get access to essentially infinite computing power.

That $US15 billion bet could have a big payoff for Microsoft: Amazon Web Services, the dominant player in the industry, is on track to book more than $US7 billion in revenues over the next year.

And while Microsoft doesn’t break out its numbers (yet), there are indications that Azure is gaining steam to challenge that leadership position.

“Azure’s growth has been incredible,” says Azure CTO Mark Russinovich. “It’s been a fun challenge to meet the demand.”

Azure has come to underpin a lot of what Microsoft does behind the scenes.

Internally, not all of Microsoft’s online services use Azure yet, Russinovich says. But more and more of Microsoft’s infrastructure does, including big parts of Bing and Microsoft Office 365, a migration very much encouraged by Microsoft CEO Satya Nadella — who, by the way, led Azure before he got the nod for the top spot.

“You can’t build a platform without first-party applications,” says Russinovich.

Even Crackdown 3, a forthcoming game published by Microsoft for the Xbox One video game console, is going to use Azure to process all the intense physics calculations while players use their scientifically improbable arsenals to level a city (in the name of justice, of course).

Microsoft has also placed a lot of emphasis on Azure Active Directory (Azure AD), its cloud-powered identity service for the enterprise that lets employees sign into any app or website they need for the job, like Salesforce or Dropbox, with their standard network password and login.

“All roads lead back to Azure,” Russinovich says.

A new “center of gravity”

Back in the nineties, Microsoft grew to its present position by offering a whole range of services that played nicely together: Windows PCs ran Microsoft Office, with the IT department running the Exchange Server on the backend to keep email up and running.

Russinovich says that Azure offers a similar potential for Microsoft’s domination of business software.

If you’re an enterprise, Azure is a “center of gravity” that helps you centralize your employees’ identity information in the cloud — an extension of what companies have been doing under their own roof for more than a decade now with Microsoft’s Active Directory tech.

If you’re a developer, you can ues Azure to build apps that integrate nicely with those identity services and Microsoft’s other Azure-powered services.

If you’re an end-user, it’s powering Office 365, and you’re taking advantage of the reliability and scalability of Microsoft Azure without ever knowing it.

And since Azure and Windows Server are based on the same technology, an application running on one can just as easily run on the other (or both), and Azure works with the whole range of Microsoft tools and utilities for computing infrastructure management, Russinovich says. Whether you want to run apps in your own data center, in the cloud, or both, Azure can be there, Russinovich says.

So couldn’t other enterprise software companies make the same kind of move? Russinovich doesn’t think so. It takes “culture” and an investment in building out an ecosystem of partners, services, and tools that help bring your customers what they need to build and run killer apps. “If you don’t, you’re not going to ship a reliable product.”

NOW WATCH: Here’s Microsoft’s amazing vision for what the HoloLens can do

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.