Unique to the operating system is its Fabric Controller, which makes data-center resources appear as one big pool to ensure service availability even if individual servers fail. The Controller also lets users upgrade services on the fly.

"It sounds to me like they have re-invented VAX clusters on top of Windows," said Al Gillen, an analyst with IDC. "They are in effect creating a single system image in fabric."

With that, Gillen says, will come application design considerations. "You are moving from an OS API to a service-oriented API. You become more married to the fabric than the OS."

Microsoft is using the fabric design to tout a scale-out model using more boxes rather than the scale-up model of increasing CPU and memory in individual boxes. Microsoft has worked exclusively with to develop customized hardware for the Azure operating system and the fabric design that will run in its data centers.

The infrastructure services layer of the Azure Platform provides a range of services including Live Services such as Hotmail and Live ID that developers can choose to use with their applications. The layer also includes SQL Reporting and Analysis services at the heart of a database for the cloud, and .Net Services pulls in features such as the federated identity services of the platform introduced at PDC.