Dell is clearly getting into the Windows Azure business.  With recent news of Microsoft investing in the privatization of Dell, many are wondering what the future holds.  My predictions are more about Microsoft and Windows Azure than Dell.

For several years, Microsoft has been creating a new operating system for data centers.  This operating system has been called “Azure”.  For now, Microsoft has created its own data centers.  We may speculate that Microsoft is trying to become a hosting and data center company.  After all, why stand up data centers all over the world?

I think the Azure data centers are a means to an end.  Microsoft, at its core, is a platform company.  They build tools that the industry uses to build solutions for companies.  Microsoft doesn’t want to compete with Rackspace and OrcsWeb for business.  On the contrary, Rackspace and OrcsWeb are great customers.  Microsoft sees the change in the industry in computer.  Microsoft is designing a new server operating system that manages multiple servers.  In fact, this new operating system is a data center OS.  Windows Azure is an operating system for a data center.

Microsoft needs Dell to create a new type of mainframe.  This mainframe will run Azure and will fit into a normal data center cabinet.  Dell and Microsoft can collaborate and deliver on the dream of a private cloud.  With a server form factor that fits in existing data center, Dell and Microsoft can deploy Windows Azure into every I/T department and colocation facility in the world.  This cabinet would have a set number of CPU cores, RAM, and storage.  It would be “gridable” so that it could collaborate with other Azure servers in the data center.

If Windows Azure is only available in Microsoft data centers, it will not succeed in becoming as successful as Windows Server 2008/20012.  In fact, Amazon could purchase and provide Azure hosting as well in its offering.  At its core, Microsoft doesn’t want to dominate the data center hosting business.  Microsoft wants to create the next operating system for the data center that will dominate the server market and enable hosting partners all over the world to serve their customers.