Published on the 05/08/2015 | Written by Beverley Head

When Microsoft’s Australian based cloud solutions went down for an extended period last month, Jason Zander, corporate vice president of Azure, was on holiday…

But he was on call, and oversaw the recovery operation from Hawaii, which eventually got the service back up and running.

The root cause of the problem according to Zander was a glitch in the firmware in a top-of-rack networking switch. The problem was fixed and eventually full service restored, with no loss of data due to the company’s Australian geopairing between Sydney and Melbourne data centres.

Keeping the lights on, growing the Azure platform to meet rampant hyperscale demand, offering enterprise grade tools and supporting hybrid solutions mixing public and private cloud, is all part of Zander’s day job.

Demand for cloud services is rising rapidly in Australia. Technology analyst Telsyte in June forecast that the Australian Infrastructure as a Service market alone would rise from around $360 million this year to $900 million by 2020.

A newly released cloud survey, conducted by Harvard Business Review on behalf of Verizon, gives a clue as to why. HBR asked 452 international executives about cloud and its perceived business value. The results show that 40 percent of respondents say the cloud has increased their revenues, 36 percent say it’s boosted profit margins and 39 percent said that data security has been improved.

(The report does not however reveal the experience of the 60, 64 and 61 percent of respondents which did not report those respective benefits.)

Microsoft does not break out its cloud revenues by geography but internationally, those revenues are growing fast – with an annualised run rate of $US8 billion today, tipped to reach $US20 billion by 2018. Microsoft says cloud subscriptions are growing by 95,000 a month.

Most cloud revenues come from Office 365, with Azure and Dynamics CRM (Microsoft’s alternative to Salesforce) bringing up the rear – but the cloud data centres that Zander builds and manages underpin it all. And these are huge data centres which can house as many as 600,000 servers apiece.

He believes that cloud demand today is just the tip of the iceberg with growing enterprise appetite for containers, microservices and Internet of Things deployments expected to rapidly boost cloud requirements.

“One area getting a lot of attention is containers and microservices. Containers offer the ability to do even smaller footprints for your workload, we have Linux containers, and Windows containers.”

Zander said that Microsoft now also had its Azure Service Fabric available in preview which features a lot of the same code the company uses internally for microservices development, in turn used to create SQL database as a service.

He also sees the rise of IoT as being a driver of demand for public cloud, which Zander said offered “an endpoint for devices” with data from devices then being pulled back into hybrid clouds for analysis.

In terms of storage demand he said growth is already “exponential”. Microsoft clouds currently host multiple exabytes of data with Zander planning to handle zettabytes within 5-10 years.

He said that in October last year Microsoft’s cloud was handling 20 trillion storage objects – but that this figure has already soared to 60 trillion.

Zander won’t say how much Microsoft invests in the cloud – except to acknowledge that it regularly soaks up investments measured in billions of dollars.

Australian users are as of this week paying a bit more for the privilege with Microsoft on Saturday raising local prices by 26 percent for new or renewing cloud users because of the sliding Australian dollar.

The author visited Seattle as a guest of Microsoft