Microsoft's Azure cloud is a distant second to Amazon Web Services (AWS), and Nadella is racing to grab a bigger share of the market as companies rapidly move workloads out of their own data centers and into the cloud. Promoting emerging open source projects is critical to win business from developers who want the largest possible choice of software and platforms.
"With all of the open source projects that are all the rage with developers, you have to have the offerings to cater to that if you want to attract them to your cloud," said John Vrionis, a partner at Silicon Valley venture capital firm Lightspeed Venture Partners and an investor in enterprise software. "If developers start in AWS and get comfortable, they're not going to even think about Azure."
Microsoft recently started working with Databricks to bring the start-up's data integration and analytics tools to Azure. Databricks, one of a few companies commercializing the open source Apache Spark framework, has to date only run in AWS. And late last year, Microsoft made the shocking decision to join the Linux Foundation as a platinum member, publicly supporting the open source platform that has long competed with Microsoft's flagship Windows operating system.
This new emphasis on openness is not limited to Azure. A year ago, Microsoft spent $500 million on a company called Xamarin, whose software helps developers create apps across all major mobile platforms, which primarily means iOS and Android.
Cloud is the big battle. That's where Microsoft's Windows servers, which have a big role in many companies' data centers, are being tossed aside as businesses offload their infrastructure. At the end of 2016, AWS controlled 40 percent of the cloud infrastructure market, while the next three players -- Microsoft, Google and IBM -- accounted for a combined 23 percent, according to Synergy Research Group.