SWOT Assessment: Microsoft Azure

Analyzing the strengths, weaknesses,

opportunities, and threats

Publication Date: 30 Apr 2020 | Product code: INT003-000436

Roy Illsley
SWOT Assessment: Microsoft Azure

Summary
Catalyst
Cloud is now a mature technology, which can make selecting an appropriate provider a difficult
choice. One of the key differentiators between cloud providers is in the levels of support they provide
for customers on the journey to the cloud, and how they can enable and support this at a pace
organizations are comfortable with. Microsoft Azure is a global, well-established cloud provider with
more than 10 years’ experience and a presence in all geographic regions. In Omdia’s ICT Enterprise
Insights 2019/20, just over 44% of respondents said they use Microsoft Azure for at least 20% of their
cloud workloads.

Key messages
 Microsoft has a large and rapidly growing marketplace with more than 8,000 solutions from
2,500 providers.
 Microsoft Azure has a global presence with multiple data centers in each region and multiple
regions in each geographical area.
 Microsoft is on the path to become carbon-neutral by 2030.
 Azure provides nearly 300 services as either IaaS or PaaS. However, not all services are
available in all regions.

Omdia view
Microsoft has developed its Azure cloud and has key partnerships to expand its offerings and make
them more appealing to a wider enterprise audience. Two significant partnerships announced in
2019 provide clear evidence of this approach. First is the Oracle partnership, where customers can
host the application in Azure and use a fast interconnect to access databases hosted in the Oracle
cloud. Second is the VMware partnership, where customers can run VMware environments natively
on Azure. In addition to partnerships, Microsoft has won significant customers on long-term strategic
deals, such as the AT&T cloud deal announced in June 2019 worth an estimated $2bn. Omdia
believes that Microsoft Azure has evolved its offering to appeal to emerging market demand for core
systems to be hosted in the cloud. Omdia’s ICT Enterprise Insights 2019/20 survey indicates that as
cloud strategy matures, organizations are moving more of their mission-critical core systems,
including ERP, CRM, and databases, to the cloud. This shift is changing customers’ requirements. The
cloud must now be enterprise-grade, and Microsoft has a longstanding reputation as an enterprise
technology supplier.

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SWOT Assessment: Microsoft Azure

Recommendations for enterprises

Why consider Microsoft Azure?
Enterprises will find the scale and flexibility of Microsoft Azure attractive, with support for multiple
operating systems including Windows Server and multiple Linux distributions such as Ubuntu, Red
Hat, CentOS, Suse, Oracle Linux, Debian, and BSD (OpenBSD and FreeBSD). In addition, many vendors
provide specialized OS Images and customers are able to bring and build their own custom images to
be used in Azure. Microsoft also provides security features including 256-bit AES encryption, which is
used widely across Azure. Customers have the option of using their own keys or Microsoft-provided
keys for this.

SWOT analysis
Strengths
Service quality is a priority for Microsoft
Microsoft has one of the highest internal metrics for delivering service quality. It measures
availability in terms of annual rebootful interruptions (AIR-R). AIR-R is defined as a chance of
unexpectedly rebooting a VM in a certain year, and raoid recovery is similar to 1/MTBF (one over the
mean time between failure rate). Omdia found that the current rate of rebooting VMs due to
platform issues is 12% per year or roughly about once in eight years due to platform issues, including
hardware, software, and unscheduled maintenance. While this metric takes some digesting, and has
no direct comparison to other providers, it does have a practicality that makes it easy to understand.
Microsoft has a large and rapidly growing marketplace
Microsoft has more than 5,400 solutions from 2,500 providers in its marketplace, and is growing at
130% year on year. Omdia likes the approach to licensing that Microsoft has for its marketplace. It
supports both pay-as-you-go and bring-your-own licensing models, as well as custom licensing in
private offerings that are arranged between the seller and buyer outside Microsoft’s influence.
Microsoft provides a large number of services
Azure provides nearly 300 services as either IaaS or PaaS, but not all services are available in all
regions. Microsoft is also effective in its commitment to environmental concerns. By 2030 Microsoft
will be carbon-negative, and by 2050 Microsoft will remove from the environment all the carbon the
company has emitted either directly or by electrical consumption since it was founded in 1975.
Microsoft also supports solar and wind energy projects.

Weaknesses
Not all services are available in all regions
Azure provides a large number of services for IaaS or PaaS, but not all of these services are available
in all regions, which can be an issue for enterprises and deter them from deploying on Azure if a

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SWOT Assessment: Microsoft Azure

service they require is not available. Microsoft needs to ensure that all of its services are available
across all regions if it is to stand any chance of becoming the market leader.

Opportunities
Microsoft can benefit from a desire to run all applications in a single cloud
Microsoft already has a large customer-base using Office 365 on the Azure cloud. It is inevitable that
some enterprises will prefer to run most of their applications in a single cloud. The growing
popularity of Office 365 will make it easier for Microsoft to increase the take-up of Azure, particularly
as its marketplace grows. There is a whole ecosystem of Microsoft partners that provide solutions
that enhance and extend the capabilities of Microsoft applications. Many of these products are
cloud-only and therefore ideal candidates for the Microsoft cloud.

Threats
Although it is narrowing the gap, AWS is still the biggest threat to Microsoft
Microsoft is narrowing the gap between itself and AWS. According to Omdia’s ICT Enterprise Insights
2019/20, where the cloud provides at least 20% of an enterprise’s workload, AWS has a lead of just
over 13% over Azure. Although this gap has reduced from previous years, AWS is still the major
threat to Azure. Ensuring all of its services are available in all regions will help Microsoft, as will its
renewable energy endeavors.
Microsoft faces a threat from new and emerging cloud providers
Although many cloud providers are mature, there are a number of much younger additions to the
marketplace, such as Alibaba, OVH, and Tencent, which began life at a regional level before
expanding to become global players. These smaller cloud providers are taking market share from
more established providers and Microsoft needs to ensure that it keeps innovating and adding
additional services, and that these services are made available in all regions.

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SWOT Assessment: Microsoft Azure

Data sheet
Key facts about the solution
Table 1: Data sheet: Microsoft
Product name Microsoft Azure Product classification public cloud

Version number n/a Release date n/a

Industries covered all Geographies covered global

Relevant company sizes all Platforms supported Windows and Linux

Languages supported Azure Portal support for 18 Licensing options pay-as-go and bring your own
languages license

Deployment options cloud Routes to market n/a

URL www.microsoft.com Company headquarters Redmond, WA, US

Source: Omdia

Appendix
Methodology
Omdia SWOT Assessments are independent reviews carried out using Omdia's evaluation model for
the relevant technology area, supported by conversations with vendors, users, and service providers
of the solution concerned, and in-depth secondary research.

Further reading
Ovum Decision Matrix: Selecting a Cloud Services Provider, 2019–20, INT003-000382 (September
2019)

Author
Roy Illsley, Distinguished Analyst, Enterprise IT
[email protected]

Citation Policy
Request external citation and usage of Omdia research and data via [email protected].

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SWOT Assessment: Microsoft Azure

Omdia Consulting
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