Microsoft revenue from Windows Server rose a remarkable forty-six percent (46%) in 2015, even while revenue from on-premises licenses fell two percent (2%).

The source of growth? Cloud service platforms like Microsoft Azure and Amazon Web Services (AWS), whose customers would rather pay pennies per hour for a license than spend hundreds of thousands of dollars on on-premises licenses.

Amazon Web Services (AWS) cloud is ramping up efforts to make the case that you should run Windows Server or any application from Microsoft on AWS. There have been significant advances on this front in the last five months: AWS announcement of Microsoft Active Directory in December, the new AWS Database Migration Service released in January, and a new white paper published this month, all aimed at large enterprise customers.

It appears to be succeeding: according to IDC, 50% of AWS enterprise users host Windows productivity applications on AWS. It is also interesting that Windows Server licenses on Azure only rose seven percent (7%) in 2015 — likely not the main source of Microsoft Server’s explosive forty-six percent (46%) revenue jump.

Here are just a few of the features of AWS’ platform that enterprises find especially appealing:

• Pre-configured machine images (AMIs) with fully compliant Microsoft Windows Server and Microsoft SQL Server licenses included.
• AWS Database Migration Service, mentioned above, that allows enterprises to migrate their databases with virtually no downtime. Microsoft provides tools for migrating SQL Server easily to Azure, but other DB types are a more significant effort; AWS Database Migration Service supports Oracle, Microsoft SQL, MySQL, MariaDB, and PostgreSQL.  
• SQL Server on AWS RDS, a managed SQL Server service that provides automated backups, monitoring, metrics, patching, replication, etc. According to Hearst Corporation, running RDS SQL Server allowed them to launch quickly and refocus 8 or 9 engineers on other projects rather than managing on-premises databases.
• AWS Schema Conversion Tool, which converts database schemas and stored procedures from one platform to another.
• Managed Microsoft Active Directory, which allows you to configure a trust relationship between your existing on-premises AD and AD in AWS, simplifying the deployment and management of directory services. Monitoring, recovery, snapshots, and updates are managed for you. (Many enterprises may also choose to manage their own AWS AD.)
• BYOL (Bring Your Own License) to AWS with the Microsoft License Mobility through Software Assurance program. This can include SharePoint, Exchange, SQL Server, Remote Desktop, and over a dozen other eligible Microsoft products. Can be used on Amazon EC2 or RDS instances.
• Reference Architectures and Demos for running SharePoint, Exchange, SQL Server, etc. on AWS cloud.

AWS’ own report, the Database Migration Service has been used to migrate over 1,000 databases to AWS in the first quarter of 2016. This is quite an impressive figure, especially considering that it is a new service. One third of those migrations were not just moving databases, but switching database engines, further evidence that AWS Aurora and its native database services are attracting customers away from big vendor licenses with Microsoft and Oracle.

As AWS continues to develop services that facilitate large-scale migrations and help enterprises modernize applications, it further differentiates itself from other cloud vendors in depth and sophistication of services. Microsoft will have to do more to convince enterprises that they should run Windows Server and other Microsoft services on Azure, especially when AWS keeps creating native services that promise faster, easier migrations and simplified ongoing management.

Logicworks is an enterprise cloud automation and managed services provider with 23+ years of experience transforming enterprise IT. Contact us to learn more about our managed cloud solutions.