Abstracting IT closer to business value

Photo: Doug Hauger of Microsoft Doug Hauger of Microsoft explains how cloud computing is a combination of a new abstraction of resources to developers and new business models.

Interview conducted by Vinod Baya and Bo Parker

Doug Hauger is the general manager of Business Strategy in Cloud Infrastructure Services at Microsoft. Before joining Microsoft, Hauger was the director of technology at Cambridge Technology Partners, where he focused on implementing Microsoft technology in large enterprise environments. Hauger is also the author of several books on Microsoft technologies. In this interview, Hauger shares his insights on how cloud computing disrupts from both a technological and business model perspective and will transform IT organizations toward bringing more value to their enterprises.


PwC: Do you see cloud computing as a disruption of the same magnitude as the Internet, or is it different?

DH: I think there certainly will be a lot of disruption from what people are terming cloud computing. There is a lot of confusion in the marketplace, because everyone is now calling everything cloud computing, and, quite frankly, there should be two ways to look at cloud—as cloud computing and cloud services. The disruption is twofold: One is from a technology perspective, and one is from a business model perspective. 

On the technology side, there’s some disruption because cloud computing is simply the ongoing abstraction of the developer and the end user from the resources of computing. We’ve seen this over time: Operating systems, virtualization, the Internet, and so on move people up the stack and abstract them from the underlying infrastructure, platform, or software. 

That disruption, I believe, is not going to be incredibly dramatic, although somewhat disruptive. I say that because IT departments, end users, developers, and ISPs [Internet service providers] have grown somewhat accustomed to the fact that every five or seven or ten years there is another cycle of innovation in the IT industry. We’re sort of on the fifth generation of computing as we think about it at Microsoft, and in this fifth generation people now just know, “Yeah, there’s a fifth generation. There will be a sixth one; there will be a seventh.” 

I think the greater disruption is around the business model. How do you think about transferring cap-ex to op-ex? How do you think about shared risk with your vendors? How do you think about the pay-as-you-go or subscription model to IT services, which really moves these services to more of a utility type of engagement rather than a capital investment in infrastructure type of engagement?

PwC: Some argue that many of the characteristics that cloud computing promises have been with us since the mainframe days. What do you think is new here?

DH: There’s something new on the business model side that enterprise customers in particular are becoming more and more comfortable with: the pay-as-you-go concept. When I say pay-as-you-go, it doesn’t necessarily mean that you can’t prepay or you can’t have a subscription service, but it’s really paying for the unit of resource that you consume. So what’s new is that you’re seeing acceptance of that concept, even though that concept has been around for 30 years.

PwC: It’s well accepted that the pace of business change is accelerating. How will Windows Azure enable agility for your customers compared to dedicated in-house Windows Server deployments?

DH: What it provides versus on-premises is an abstracted platform as a service for your internal developers. With Windows Azure, we do that for you, and we do it in a globally scalable, distributed way. The main differences are who is doing the heavy lifting to build the platform as a service and who is taking the risk to build out the data center capacity to meet the demands. That’s us in the case of Windows Azure, and it’s the IT department in the case of, say, Windows Server System Center.

The goal we have is to radically accelerate or increase the effectiveness of developers—decreasing their time to market or time to service realization and, most importantly, increasing their ability to respond to business needs.


“There is a lot of confusion in the marketplace, because everyone is now calling everything cloud computing, and, quite frankly, there should be two ways to look at cloud—as cloud computing and cloud services.”

PwC: What will drive the adoption of Azure? Is it new applications that enterprises want to create or the migration of applications they have right now?

DH: The early adoption curve is new applications to be built on the platform, because there’s obvious simplicity there. If you have a legacy or existing application on-premises that you want to move into a cloud computing platform, there’s a lot of re-architecture that will have to take place. So it will be easier to build a new application on the platform. That said, I have been surprised by the level of enthusiasm of enterprise customers to move existing applications onto the platform and do the work required to actually get the benefits of platform as a service.

PwC: What will be the impact of cloud computing on the role of CIOs and their organizations?

DH: The impact will be different depending on whether people move toward using the off-premises public cloud or building an on-premises private cloud. If there’s a wholesale migration toward public cloud, the IT departments first must become smaller as some of the functionality is not needed and second must learn how to become a value-add line of business around application architecture—public cloud computing. The role of IT departments will be less about running the infrastructure and more about getting value out of the platform for the business. 

If businesses are more focused on building private clouds, clearly there is a huge amount of work required to retrain the system administrators and the networking teams to understand the level of expertise needed to build that private cloud and deliver it to services. In the short term, it will require significant reskilling or retooling of the IT teams.

PwC: What are some of the differences between Windows Azure as a cloud operating system and the Windows Server operating system?

DH: The major difference is the level of abstraction from the infrastructure to turn it into a cloud operating system. You’re moving developers up the stack, so they’re more removed from the infrastructure. Another difference is the global scale and reach of Azure—the ability to scale out across tens of thousands, hundreds of thousands of servers around the world.

PwC: How does this abstraction simplify what developers do?

DH: They don’t have to manage the operating system. If you’re a developer today, what do you do? You install Windows Server, you load a bunch of libraries, you install SQL Server, you configure a bunch of server-side stuff, you register things in the registry, then you write some code, and then you test it and run it. Whereas, when you have platform as a service, you don’t install the operating system, you don’t register a bunch of libraries, you don’t do things in the registry, you don’t install SQL Server. You don’t open up the box and put in 16 gigs of RAM when you had 8 gigs of RAM. You don’t decide: “Oh, I should have had four 12-terabyte drives instead of two 12-terabyte drives.” You just write your application.

PwC: What will be the impact of cloud computing on application architectures? Is there a possibility of running applications distributed across off and on-premises cloud environments?

DH: Absolutely. I think some applications will move wholesale [to cloud], and some won’t move at all. There certainly will be a disaggregation of functionality, where some will be in the cloud, some will be on-premises, and something that I’ve heard from customers a lot is that some will be in one cloud and some will be in another cloud. That’s probably not as likely a scenario, simply because the only reason to do that is cost arbitrage. I think the marketplace will be such that there’s not going to be a lot of advantage from a cost perspective, going from one cloud to another.

PwC: How do you anticipate you might be talking about cloud computing five years from now?

DH: Well, in some ways, I believe we won’t be talking about it, because it’s like many other technology phases. It will be implemented and passé. It will be part of the fabric of computing. We don’t necessarily try to define every day what client-server is, because we use it. Cloud computing will be just one more way for you to get access to computing resources.


“The role of IT departments will be less about running the infrastructure and more about getting value out of the platform for the business.”