Microsoft: We're not afraid of the cloud

Microsoft has been busy this year, rolling out Windows Server 2008 and SQL Server 2008 in a push to expand its presence in the corporate data center. To be successful, the company must overcome an economic environment that appears increasingly difficult as well as tough competition from rivals Oracle and VMware, among others

Bob Kelly, Microsoft's corporate vice president of infrastructure server marketing, sat down with IDG News Service to discuss the adoption rate of Windows Server 2008, Microsoft's plans for cloud-based services, and the recent declaration by Paul Maritz, an ex-Microsoft executive and current president and CEO of VMware, that the traditional server operating system "has all but disappeared."

What follows is an edited transcript of that interview:

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Microsoft has been busy this year, rolling out Windows Server 2008 and SQL Server 2008 in a push to expand its presence in the corporate data center. To be successful, the company must overcome an economic environment that appears increasingly difficult as well as tough competition from rivals Oracle and VMware, among others

Bob Kelly, Microsoft's corporate vice president of infrastructure server marketing, sat down with IDG News Service to discuss the adoption rate of Windows Server 2008, Microsoft's plans for cloud-based services, and the recent declaration by Paul Maritz, an ex-Microsoft executive and current president and CEO of VMware, that the traditional server operating system "has all but disappeared."

What follows is an edited transcript of that interview:

We haven't heard much from Microsoft about user adoption of Windows Server 2008 and SQL Server 2008, can you give us an update on how things are going? For example, are you finding many customers switching from Oracle?

At the end of the day, our job is to build software that customers choose to run their businesses on. My job is not out there to beat Oracle, to take Oracle's business. I just want to do a better job of satisfying the customer and, ultimately, they'll choose me for that reason.

The products have been exceedingly well received. We've never had faster adoption of the OS as we've seen with Windows Server 2008, for lots of reasons: the quality of it, the workload focus that we have, some of the efficiencies that are built into it around things like power management, that sort of thing.

When you say this is the fastest adoption you've ever seen, can you quantify that for me?

We're taking more share than we've ever taken of the x86 server world, whether you look at IDC or Gartner. We will probably make it to that magical million licenses per quarter run rate very quickly, and that's a phenomenal rate of adoption.

The other thing that's happening on Windows Server 2008 is our mix of premium SKUs (stock keeping unit), driven almost exclusively by virtualization and the rights around virtualization that we've put in those SKUs. Just think of it this way: We have three main SKUs for Windows Server 2008. If you want to run one virtual machine, you choose Standard. If you want to run four virtual machines or fewer, you run Enterprise Edition. If you want unlimited virtual machines you run Datacenter Edition.

Our premium SKU mix, on a global basis, has more than doubled over the last two years since we made the licensing change, and over the last six months it's been unbelievably fast.

Last week we saw Paul Maritz, the CEO of VMware and a guy who knows Microsoft pretty well, proclaim that the server operating system is obsolete and his company will build a virtual data center OS to manage applications. How should we interpret his comments? Is there substance to his claim?

The death of Windows has been foretold many times. It's in their best interests to position it that way.

Secondly, as I told some internal folks the other day, I know Paul and he's a great guy. I don't envy him where he is right now, because he just entered into a hornet's nest. Not so much because of Microsoft; we treat virtualization as an enabler. It's a feature of the operating system, as it's always been in mainframes and as it is in Linux distributions. What he's just done is enter a space that's crowded by his partners, and I'll give you the one that's canonically challenging for him: Hewlett-Packard.

The IDG News Service is a Network World affiliate.