More than half of Fortune 500 firms are now using Windows Azure, which lets customers rent access to servers, storage, and other services over the Internet, Steven Martin, general manager of Windows Azure, said in a blog post .
Microsoft now has 250,000 Azure customers—more than double what it had at this time last year—and is signing up 1,000 new ones per day, Martin said.
Amazon is the leader in "public cloud," which means selling access to servers, storage, and apps running its own data centers. Windows Azure is a public cloud, too.
But Microsoft thinks enterprises are always going to want to run clouds in their own data centers, which is called "private cloud." Microsoft sells the software for this, but Amazon doesn't.
Despite Amazon's success, many enterprises aren't ready to put their sensitive data in its cloud. So, Microsoft's angle is that it can offer customers a mix of public and private clouds, which is called a "hybrid" cloud.
VMware, Citrix, HP, and others are also pushing the hybrid cloud message.
The knock on private clouds is that they're expensive and don't offer the economic benefits of shared hardware. This is why Amazon's pricing for its cloud, called Amazon Web Services, is so cheap.
Amazon has done OK even without a private cloud service. A ccording to Wall Street analyst Ben Schachter at Macquarie Capital , it's on track to make $3.8 billion from cloud services this year.
Microsoft said in April that Windows Azure had racked up $1 billion in revenue over the previous 12 months, but that included sales of software to hosting providers.
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