A Microsoft reader recently questioned the fairness of my post comparing public cloud competitors focused on PaaS versus IaaS. While I actually agree with several of his points, I think it overlooks the fundamental truth: the public cloud IS IaaS.
It is by no accident that the core offers of Amazon, Rackspace, IBM and very soon HP look very similar: this is what the majority of customers want from a public cloud provider. In the process of "skating to where the puck will be", Microsoft has found itself off the rink and in the locker room in the battle for the public cloud. The good news is the way back is clear: embrace IaaS.
Below is a graphic of what I call the Azure Funnel, which illustrates what I think is the fundamental problem with a horizontal PaaS platform like Azure.