Azure itself is imo PaaS and not IaaS. Do you agree?
MS gurantees an availability of 99% and a strong consistency. You can find MS SLAs here: http://www.microsoft.com/windowsazure/sla (three SLAs Uptime: http://img229.imageshack.us/img229/4889/unbenanntqt.png ) I can't find anyhing about how they are going to archive that. Do they do backups? If Yes: How do they manage consistency? According to the Cap theorem (http://camelcase.blogspot.com/2007/08/cap-theorem.html ) their claims are not realistic. 2.1 Do you know detailed technical stuff about the how they are going to realize the claims about consistency and availability?
On the MS page you'll find three SLAs .docs, one for SQL Azure, the second for Azure AppFabric/.Net Services and the third for Azure Compute&Storage.(Screenshot in 1.) How can one track whether SLAs are violated? Do they offer some sort of monitor, so I don't have to measure the uptime by myself?
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3In answer to your first point, MS itself calls Azure the "Windows Azure Platform", so its status as PaaS seems self-evident.
In response to your question about backups in the second point, one of the main promises of cloud computing is to allow you to ignore the administration of the resources. They promise safe data, it's up to you as to whether you trust them, but if you want to know exactly how they implement it, you're missing the point of the cloud abstraction.
The third point is more interesting, but I would assume it's up to you to pay attention (write monitoring software?) to whether they live up to their SLAs.
1) Azure is a classical "Platform as a Service". I agree
2) 99% is not a very high availability. It means that Azure is allowed to be 3 full days down per year. The blog article you referenced is IMHO quite suboptimal. There is another one that explains the CAP theorem in more detail.
"Will Microsoft add VM functionality to Windows Azure to expand the set of existing applications that can be run on it?
Yes, Microsoft will add Virtual Machine functionality to Windows Azure to expand the set of existing applications that can be run on it. This Virtual Machine deployment functionality will enable developers to run a wide range of Windows applications in Windows Azure, while taking full advantage of the built in automated service management." ( http://www.microsoft.com/windowsazure/faq/ )
thus MS is planning Azure to become IaaS.