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Microsoft really is going "all in" to the cloud

Company exec says sales pitch will be cloud first, license second

By Robert Mullins on Tue, 03/16/10 - 5:26pm.

Well, this was inevitable. A tech conference devoted entirely to cloud computing.

Cloud Connect pulled into Santa Clara, Calif., for three days this week and its organizers, the people at Techweb, called it "the only event which brings together the entire cloud computing ecosystem." Along with all the other usual suspects in tech, the conference gave Microsoft an opportunity to fill out more of the details of its cloud computing strategy that CEO Steve Ballmer laid out March 4 in a speech at the University of Washington-Seattle.

The point man for Microsoft at Cloud Connect was Matt Thompson, general manager of developer and platform evangelism, who said the Ballmer cloud catch-phrase "We're all in" means their new sales pitch is cloud first, license second. This was surprising given my conversation last week with IDC's Stephen Minton, who believed that Microsoft was reluctant to let go of its license revenue model but sees the inevitability of the move to cloud computing.

Nonetheless, Thompson declared today “We are actually turning the company sideways." When pitching a sales prospect Exchange Server, for instance, the Microsoft rep will ask if they want to have Microsoft host the application in its cloud or a partner's cloud, or whether the customer wants to run it internally in their own data center.

"We’re moving everything to the cloud and from a first option perspective," he said. "So it's not something where the salesman says, 'Yeah, yeah, here are some more licenses. Oh, and you also have the option to host.' It's going to be, 'Tell me why you don’t want this hosted?’”

Thompson went into more detail about the Windows Azure Platform introduced in January that is the cloud equivalent of Windows Server. Understanding that many customers will be maintaining their on-premise data centers while simultaneously moving some computing to a cloud provider, Thompson said Azure is designed to operate the same as the Windows Server its customers already know and love.

“What [Microsoft is] saying is on-premise and in the cloud, you’re going to use the same software stack, the only difference is how it’s deployed,” he said.

Going forward, there are going to be many businesses that will have to use a combination of on-premise and cloud computing. For financial services firms such as Visa or American Express, "they are never going to put their data in a public cloud for obvious reasons," he said. He also gave the example of a biomedical firm developing a new drug that for competitive reasons wouldn't put information about clinical trials in a public cloud, but could use a cloud based app for statistical analysis.

For those and other instances, Microsoft is bringing out AppFabric later this year, which Thompson described as allowing the user to "decompose an application so you can run part of it on-premise and part in a public cloud."

Microsoft is also building out or has built out Microsoft developed data centers for its cloud computing service on every continent in the world but Australia. "Basically, we don’t want to ship any bits across large bodies of water,” Thompson said.

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