Microsoft's 2009 to-do list: Deliver services, get virtualized, storm the Googleplex

It has been a year of transition for Microsoft in 2008, with the biggest being co-founder and company icon Bill Gates stepping aside and Ray Ozzie assuming the role of chief software architect. On the technology side, Microsoft's services push dominated its agenda. Microsoft introduced Azure, its cloud operating system, and released online versions of Exchange and SharePoint, two of its most popular infrastructure servers. "Exchange Online could be a sleeper product," says Peter O'Kelly, principal analyst with O'Kelly Consulting. In addition, the company revealed it was developing for the first time Web-based online versions of popular Office applications. It's all a set-up for what will define Microsoft's 2009. Here is a look at five key issues and a handful of honorable mentions that will be in the spotlight over the next 12 months

1. Pay attention to that man behind the curtain

The wizardry of Oz -- Ray Ozzie, that is -- will have a profound impact on Microsoft in 2009, and every eye will be on the successor to Bill Gates. Ozzie had a winner's grin in October when he introduced Azure, Microsoft's cloud operating system two years in the making. Now, he must define the platform, fill in its gaps and convince developers they should get behind it and push. Then he has to finish painting Microsoft's story around software-plus-services. It is no less than a generational shift for Microsoft, and 2009 should set the tone for Ozzie's legacy. Can he rescue the company from the "services disruption" he claimed could be the very death of Microsoft in a 2005 memo sent to employees? It's a question without an answer right now, but one thing is clear, he's not in Kansas anymore.

2. Get virtualized

Game on. For years critics said comparing the virtualization tools from VMware and Microsoft was like comparing LeBron James to that tall kid down the block who plays basketball in his driveway. Microsoft has jettisoned James from its TV advertising campaign, but VMware is still around and still the ever-present all-star. With Microsoft's Hyper-V now firmly on IT's radar as part of Windows Server 2008,  and with the recession now official and reinforcing virtualization's cost-saving benefits, Microsoft will deploy a full-court press in order to make its case that Hyper-V was worth the wait.

3. Bury Vista, roll a lucky 7

Microsoft will spend less time trying to convince people that Vista is a good operating system with a bum rap and more time moving on to the slick UI enhancements and IT benefits of Windows 7. Like Ozzie with Azure, Windows 7 could be the legacy moment for Steven Sinofsky, who made his name stamping out versions of Office before taking over the Windows team. Sinofsky will deliver the first feature-complete beta version of Windows 7 in early 2009, and then the chatter will reach a fever pitch as to its merits and whether Sinofsky can deliver it in time for the holiday buying season.

4. Storm the Googleplex

Microsoft vs. Google. With Microsoft moving quickly into the service realm and with Google eyeing the enterprise, this battle will be as hot as ever in 2009. The two have coffers stuffed with cash, executives with big ideas and a passion to stomp the other into submission. The most active battlefield is likely to be around productivity applications with Web-based versions of Office applications slated from Microsoft and Google trying desperately to put IT features into its Apps platform. Of course, there will always be the fight for advertising dollars and search eyeballs, but with Google's sizeable lead it isn't likely to feel much heat from Microsoft in those areas.