The Azure Services Platform uses a specialized operating system, called Windows Azure, to run its "fabric layer" — a cluster hosted at Microsoft's datacenters that manages computing and storage resources of the computers and provisions the resources (or a subset of them) to applications running on top of Windows Azure. Windows Azure has been described as a "cloud layer" on top of a number of Windows Server systems, which use Windows Server 2008 and a customized version of Hyper-V, known as the Windows Azure Hypervisor to provide virtualization of services.
The platform includes five services Live Services, SQL Services (which is now Microsoft SQL Azure), .NET Services, SharePoint Services and Dynamics CRM Services which the developers can use to build the applications that will run in the cloud. A client library, in managed code, and associated tools are also provided for developing cloud applications in Visual Studio. Scaling and reliability are controlled by the Windows Azure Fabric Controller so the services and environment don't crash if one of the servers crash within the Microsoft datacenter and provides the management of the user's web application like memory resources and load balancing.
The Azure Services Platform can currently run .NET Framework applications compiled for the CLR, while supporting the ASP.NET application framework and associated deployment methods to deploy the applications onto the cloud platform. Two SDKs have been made available for interoperability with the Azure Services Platform: The Java SDK for .NET Services and the Ruby SDK for .NET Services. These enable Java and Ruby developers to integrate with .NET Services.
References: http://en.wikipedia.org/wiki/Windows_azure
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