Is Microsoft's cloud strategy really that special?

Ballmer's five principles not unique to cloud or Microsoft

Microsoft executives continue to evangelize the cloud strategy laid out by CEO Steve Ballmer in a March 4 presentation at the University of Washington's Seattle campus. This past week at SaaScon 2010 in Santa Clara, Calif., Tim O'Brien, Microsoft's senior director of platform strategy, explored each of Ballmer's five tenets of cloud computing in more detail.

After listening to O'Brien's presentation, I came away thinking that the five tenets, while well thought out, aren't necessarily unique to cloud computing or differentiate Microsoft's cloud offerings from those of its eager competitors.

Ballmer' first principle: "The cloud creates opportunities and responsibilities," which even Ballmer admitted at first "sounds like some blah, blah, blah, business term." O'Brien elaborated by quoting that famous business thinker Spider-Man: "With great power comes great responsibility."

As Microsoft and other cloud providers handle more of their customers' data, they are responsible for protecting it, he said, citing the example of Hotmail where users get their free e-mail "in the cloud." Microsoft monetizes the service by delivering ads to users based on keywords found in their e-mails.

O'Brien then reiterated Microsoft privacy policy: "We will collect certain information about you to personalize ads, we'll collect your gender, your location, your age ... but we will not select ads based on data that is directly identifiable and traceable back to you."

All well and good, of course, but what does this have to do with cloud computing? How different is this from a policy Microsoft or any other tech company would be expected to have to protect customers' privacy offline? And citing Hotmail as a cloud service speaks to the kind of squishy definitions vendors are offering for cloud computing. Calling Hotmail cloud computing reminds me of Oracle CEO Larry Ellison's diatribe against the "nonsense" of cloud computing as something new. "All it is is a computer attached to a network, what are you talking about?" Ellison railed at an event in San Jose, Calif., in 2009. Not that Oracle isn't chasing cloud dollars, too.

Ballmer's second tenet of cloud computing: "The cloud learns and helps you learn, decide and take action." O'Brien actually had an interesting take on this. He cited Bing Travel, part of Microsoft's rejuvenated search engine, for making travel arrangements. When you enter in the Bing search window, "Flights from L.A. to New York," Bing Travel will start to ask the user what date they want to go, what time, will they want a rental car or a hotel, etc. "Oh, and by the way you might want to buy this ticket in a hurry because the price is about to go up," he added. Bing Travel, he said, scours "200 billion bits of historical data" about ticket prices and "learns" how prices can fall as the departure date approaches and airlines discount tickets to fill seats.

Frankly, I found that an impressive example of how the cloud learns and translates that knowledge into improved service. But it may not be long before other travel sites develop the same capability if they haven't already.

Ballmer's third principle: "The cloud enhances your social and professional interactions." Beyond social networking on Facebook and Twitter, O'Brien explained how the wisdom of the crowd can help a company make business decisions.

He cited Microsoft customer Starbucks that wanted to collect real time information at headquarters from its stores to direct resources to where they are needed. "It's unseasonably hot today here in Santa Clara; people are ordering iced coffee drinks like crazy. We better get more ice out to stores in these areas," he said. Installing physical SharePoint servers in each of 10,000-plus locations would be cost-prohibitive so, "the cloud is the obvious solution."Microsoft beat out Google for the Starbucks account, O'Brien noted, which tells me Google probably has a shot to win the next account. Google has already won many.

Ballmer's fourth principle: "The cloud wants smarter devices." O'Brien cited Xbox Live as an example of this principle. But beyond gaming, devices from PCs to mobile phones are getting more capable and cheaper and the cloud can deliver software and services to those devices to make them more robust and useful. True enough, but I don't think Microsoft is alone is understanding this or offering compelling solutions.

Ballmer principle five: "The cloud drives server advances that, in turn, drive the cloud." This is the tenet of cloud computing of most relevance to enterprise customers. O'Brien explained how a cloud computing service can help a customer handle "bursting workloads" in which they can handle a spike in data traffic by accessing extra computer capacity from their cloud vendor. Microsoft Azure is the cloud version of its Microsoft Server platform for enterprises. "They still run their on-premise infrastructure but they have overdraft protection that they use Windows Azure for today," he said.

These five principles help Microsoft of frame and organize its cloud strategy. But other cloud vendors are thinking along same lines and Microsoft is going to have to compete with them on innovation, product, service and price to hold onto its legacy on-premise customers as they look to the cloud. O'Brien, in an interview with me, argued that Microsoft has an advantage over the others in that enterprise customers know Office, Exchange, Server, SharePoint and other Microsoft products and will embrace them as cloud offerings. But Microsoft is the one defending its turf from these agile competitors.

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Copyright © 2010 IDG Communications, Inc.

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