Redmond is betting adding cloud-integrated storage to its mix will advance the company's cloud OS vision and help customers more efficiently embrace the world of hybrid cloud computing. It's all about the much-talked-about explosion of data .

"Customers faced with explosive growth in data are looking to the cloud to help them store, manage and archive that data. But, to be effective, cloud storage needs to integrate with IT's current investments," said Michael Park, corporate vice president of Microsoft's Server and Tools Division. "StorSimple's approach helps customers seamlessly integrate on-premises storage with cloud storage through intelligent automation and management ."

Optimizing Storage Costs

StorSimple solutions combine the data management functions of primary storage, backup , archive and disaster recovery with cloud integration . The idea behind this approach is to help customers optimize storage costs, data protection and service agility.

StorSimple boasts a cloud snapshot capability that works to protect and rapidly restore production data using public cloud tools automatically. StorSimple has won nods from large enterprises across many vertical markets, with retail, oil and gas, manufacturing, consumer goods, healthcare , and financial services clients making their first public cloud deployments using the technology.

"Most StorSimple customers are mainstream IT organizations that have chosen Windows Azure as their primary cloud," said Ursheet Parikh, co-founder and CEO of StorSimple. Essentially, the merger will combine the benefits of StorSimple and Windows Azure.

Beyond the cloud snapshot technology, StorSimple brings the ability to securely and transparently integrate cloud storage for on-premise apps and offers a single appliance that promises high-performance tiered local and cloud storage, live archiving, cloud-based data protection and disaster recovery.

A Profitable Niche

Charles King, principal analyst at Pund-IT, told us cloud storage is one of the most consistently winning -- and commercially profitable -- cloud-based services for companies like Amazon , Rackspace, Go Grid and even Google. So he's not surprised to see Microsoft getting involved in the space in a deeper way.

"Cloud storage is an incredibly sticky business model," King said. "Once a consumer or a business chooses a particular cloud storage provider, moving the data to another provider is often prohibitively complex and painful."

Moving from one cloud back up service to another means backing all the data up to a local device and then uploading everything to the new provider. There is so little difference between cloud storage providers from a performance and cost standpoint that many people decide not to make the change.

"This also complements a lot of other services Microsoft already has in the cloud," King said. "Acquiring a company with a deep understanding of the requirements for cloud storage and with an existing set of successful products is a smart thing for them to do. It's certainly cheaper and easier than trying to build it out on their own."