Microsoft to show off "Kumo" and offer more ad-supported cloud services

Microsoft will be testing its new-and-improved search engine, Kumo, next week, reports say, although the live version is not expected to be rolled out at that time. This goes hand-in-hand with Microsoft's hints that it will be rolling out more, advertising supported services.

Microsoft will demo Kumo at the WSJ's All Things Digital conference, reports say. Just as Google blew away Yahoo with its superior search results, so does Microsoft plan to use Kumo to outperform Google. Microsoft insists that Kumo will organize search results better so that users spend less time sifting through Web sites they find via searches. Microsoft has tried numerous things, from its failed merger with Yahoo to a cash rewards system, to get users to use Live, which works about as well as Google. It will take an amazing leap in search technology for Kumo to do what Live has not yet done, and build a loyal following of both users and advertisers.

Microsoft's Satya Nadella, head of research at the online services division, reportedly sent an e-mail announcing the demo of Kumo along with an explanation of how Kumo plans to one-up Google. He cited research that said that 40 percent of search queries fail, half of queries are from previously run searches and nearly half take longer than 20 minutes. It all adds up to a search experience with room for improvement, to his way of thinking.

In the meantime, Chief Software Architect Ray Ozzie told Wall Street analysts at a meeting earlier today that users have grown accustomed to advertising-supported Web-based services. Microsoft plans to invest even more heavily in this area. He said the opportunity for Microsoft is delivery of freebie, cloud-based entry-level versions of software, while enticing users to pay for an upgrade.

This, however, would not affect Microsoft's enterprise software sales -- the company's bread and butter, Ozzie promised investors. When it comes to cloud computing, Ozzie thinks enterprises will remain slow to move into the area and preached again Microsoft's vision of a hybrid model of some software in the cloud and some on the desktop.

"Enterprises will not really trust the cloud until they get some experience. The best way to get experience is to take something like e-mail and bring it into the cloud from an IT management perspective ... once they build up their comfort level, the opportunity will get greater. But the industry needs to get better. Most customers don't believe a vendor's SLAs," he said.

However, he believes that at some point every enterprise will have a mix of on-premises and cloud applications and will move to the cloud first e-mail and document management. Ozzie believes that in the next year, enterprises will begin heavily experimenting with hosted Exchange and SharePoint.

At least, that's the future that Microsoft (and Ozzie now that he's a member of it) hopes will happen. Should enterprises abandon other fat client software for less-expensive cloud-based services with less features, but less administration (such as Office), Microsoft is in trouble. Even if an enterprise ultimately chooses cloud services that are Windows and Microsoft centric, Microsoft simply won't have the stranglehold on the market to charge the kind of licensing prices it can command today.

Then again, that doesn't mean the hybrid approach is completely wrong, either. Microsoft's Office Live Workspace offers an idea of how this might work. Cloud storage and sharing is available from within Office applications, but users are not dependent on an Internet connection to be able to work.

Office Live Workspace

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