July 10, 2017 / 1:17 PM / 14 days ago

Microsoft to offer local version of Azure cloud service

The Microsoft logo is shown on the Microsoft Theatre at the E3 2017 Electronic Entertainment Expo in Los Angeles, California, U.S. June 13, 2017.Mike Blake

WASHINGTON (Reuters) - Microsoft Corp on Monday unveiled a new service that allows customers to use its cloud technology on their own servers, part of the company's efforts to refocus its product line to compete more effectively with rivals Amazon.com Inc and Alphabet Inc's Google.

The world's biggest software maker is looking to carve out a niche among customers who cannot or do not want to move all their computing operations to the massive shared data centers that are collectively known as the cloud.

“One of the key differentiations we have with Azure versus our two biggest competitors in the cloud platform space is our ability to support true hybrid solutions,” Judson Althoff, Microsoft's executive vice president of worldwide commercial business, told Reuters.

Azure is Microsoft's cloud-computing platform, pegged by most market share studies as second in cloud computing behind Amazon Web Services.

Dell EMC, Lenovo Group Ltd and Hewlett Packard Enterprise Co will provide new servers and equipment needed to run the service, Microsoft said. The companies will ship the first systems to customers in September.

Julia White, corporate vice president of Azure, said that the new service, called Azure Stack, is aimed at businesses that want to use Azure but have specific needs for a localized version of the software.

“Azure Stack is an extension of Azure,” White said. “It’s not a replacement for your legacy private cloud.”

White said Azure Stack could be used by companies with operations in remote locations where it can be difficult to get an internet connection, such as oil rigs or cruise ships, or those in regions with regulations that require that data be kept locally.

“We’ve seen a lot of pent-up demand from end-user customers as well as third-party providers who are anxious to deploy this solution,” said Gartner analyst Ed Anderson. “I anticipate that this offering will provide a significant boost to Microsoft’s overall cloud business.”

Microsoft also announced Microsoft 365, a service that allows customers to purchase the Office 365 productivity suite, Windows 10 and other services in one bundle.

The product announcements, part of the company's Inspire customer conference in Washington, come just days after news that Microsoft plans to lay off thousands of sales reps.

Microsoft is reorganizing to simplify its sales and marketing efforts and put more emphasis on partnerships with services companies such as KPMG.

Reporting by Salvador Rodriguez; Editing by Jonathan Weber and Bill Rigby

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