Mary Jo Foley has some interesting, and somewhat sad news about Microsoft’s Azure Platform…

Will Microsoft allow enterprises to do on-premise hosting based on its cloud computing Azure platform? The latest — and perhaps final — answer is no.

Since Microsoft first rolled out its Azure cloud platform last fall, I’ve seen conflicting reports about whether or not the Redmondians will provide business users with some way to do private/on-premise cloud computing via Azure (i.e., host the Azure operating system and/or Azure services themselves in their own datacenters, instead of in Microsoft’s Quincy, Wash., and/or San Antonio, Texas, ones).

I really think this is something people should pay more attention to.  What the above basically means is a company writing an application on Azure will have to stay with Azure (and it’s monthly fee) indefinitely.  Either that or face rewriting a large chunk of their application.

This isn’t the case for services like Amazon’s EC2 which imitate actual servers. An application written on EC2 can be moved to a local server almost seamlessly. 

The point is an important one because the larger you get the less sense Cloud Computing in general makes.  Many companies and/or startups are going to eventually get to the point where it makes more financial sense to house their own servers and have their own full time staff to maintain them. 

At that point Azure falls flat. 

Probably more important though is the fact that companies that will never grow that large don’t know it.  Everyone plans to one day be big enough to have their own datacenters.  I mean, who goes into a startup thinking it’s not going to be the next big thing?  No one that I’ve ever met.  Meaning Azure’s inability to run anywhere but on Microsoft’s servers will disqualify it for a lot of projects.

As I’ve said before on this blog I like Azure.  The idea that the cloud can deal with all the scaling issues for you is a very compelling one.  But Azure just seems to have a few fatal flaws that will prevent it from being a true success in the market place.