Microsoft: Get your cloud here

Several key Microsoft executives explain why the company is focusing development dollars around cloud computing.

Microsoft is making it quite clear that it wants in on the cloud, and the future the software giant envisions for cloud computing has everyone from developer to executive to consumer tapping into the cloud for services or even hosting their own.

While some industry watchers might argue that Microsoft is late to the cloud computing game, company executives are making it clear that Microsoft in 2010 will be moving aggressively to the cloud. And that's because the cloud today represents the game-changing, disruptive technology that the microprocessor and the Internet were in years past, according to Microsoft CEO Steve Ballmer, who said cloud potentially represents a $3.3 trillion market.

"The cloud thing is just another big step that has the world buzzing and thinking about that will create opportunities," he said. "It's the gift that keeps on giving."Ballmer spoke Thursday at the University of Washington's Paul G. Allen Center for Computer Science & Engineering in Seattle about the company's plans to focus development and product efforts around the cloud. He explained that currently 70% of some 40,000 Microsoft employees' work is either directly or otherwise related to cloud-based projects and Ballmer estimated that in a year that number would jump to 90%. He admitted that a lot of work on the recently shipped Windows 7 "was not cloud-based," but a slew of other Microsoft products would start with the cloud.

"Bing is born of the cloud, Windows Azure, SQL Azure, Windows Phone 7 and Xbox - what we do now starts with cloud," Ballmer told attendees at the presentation which was also delivered as a live Webcast.

Separately, Microsoft COO Kevin Turner spoke at Cebit trade show, detailing how the company expects to devote some $9.5 billion on research in 2010. "We're going to change and reinvent our company around leading in the cloud," Turner said, according to an IDG News Service report.

Bob Muglia, president of Microsoft's server and tools business, said in late February during an interview with Goldman Sachs that Microsoft will indeed be focusing much of its investment in cloud.

"I do think the market will transition from a virtualization market to the subject focusing around the cloud," he said. "The future lies and the majority of our investment is going there."

Yet despite the company's planned investment in cloud computing, Muglia explained how Microsoft doesn't expect to be making revenue on the technology area for a couple of years.

"From the perspective of investment internally, interest from customers and engagement clearly the cloud will be an area of focus," Muglia said, according to a recent article in Network World. "But in the next two to three years that is not what will drive financial growth in server and tools. It is essentially zero percent of our current operating revenue."

With cloud computing being surrounded by much market hype, it remains a confusing technology area for many and an unfamiliar term to some. The premise of providing computing resources via a shared network of computers in an online hosted environment loosely defines cloud. And it should be noted that Microsoft's plans to focus development on the cloud do not only pertain to public cloud offerings, Ballmer explained, prompting some in the audience to worry about potential silos of cloud technologies emerging. Admitting that silos might be a reality even in the cloud, Ballmer emphasized Microsoft's commitment to driving innovation in all areas of cloud development.

"We need to enable third-party innovation around the cloud. Is it possible that some silos will grow up? [It's] definitely possible, but they will only grow up for very good reason," Ballmer told the audience. "There is a set of things that people will want to keep private. And they should have the right to decide how to treat that as someone who invested in the creation of something valuable."

And even those companies, customers or even countries wanting public cloud services, Ballmer suggested, might not be able gain access to public cloud environments because vendors such as Microsoft may not have resources deployed in every geographic area. But such customers could enable their own private cloud using "container" technologies that package hundreds or thousands of servers into a trailer requiring a network connection, power and cooling, Ballmer said.

Ballmer used a few different definitions for what he said Microsoft envisions: "Partner cloud, customer cloud and private cloud. For a lot of reasons, it will be many years before government agencies have their data or customer data living outside of their area. The regulatory environment is imperfect," he said. "Someone should be able to implement a Windows Azure cloud in any country."

Posted by Denise Dubie

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