Ballmer Guns for the Cloud

Microsoft is betting its business on cloud computing, which will power everything from the Xbox and Windows Phone 7 to Windows, Office and a massive data center in a box.

Less than five months after releasing Windows 7, Microsoft reported that it has shipped 90 million copies -- a figure that will jump to 300 million by year's end. But Windows 7 is becoming old news, as Microsoft has started talking up how it's reinventing itself for the future. And that future largely rests in the cloud.

While Microsoft's cloud ambitions have been apparent for some time, CEO Steve Ballmer turned up the volume in a big way by making the cloud the official rallying cry for the company moving forward. "We're betting our company on cloud computing," Ballmer said in a speech last month at the University of Washington.

"We're really on the cusp of a huge market transition and it's the cloud and cloud services," said Microsoft COO Kevin Turner, speaking in a keynote address at the CeBit conference in Hanover, Germany, just one day prior to Ballmer's speech. Turner, who also announced that Microsoft will invest $9.5 billion in R&D this year -- much of it toward technology in some way tied to the cloud -- called this a "unique inflection point for Microsoft."

Private Cloud Preparation
These remarks were intended to send a signal to customers, partners and rivals that everything Microsoft develops will have a cloud focus. That includes the next release of its Xbox gaming console and the recently announced Windows Phone 7 Series. (For more on Windows Phone 7, see the Feb. 15, 2010, news story, "Microsoft Revamps Mobile Strategy with Windows Phone 7," at Also cloud-focused will be the 2010 wave of products due out in the next month -- including Office, SharePoint and SQL Server -- and the company's next-gen data centers, which will be based on large containers that house the equivalent of 10,000 servers.

Underscoring this focus, Ballmer said that 70 percent of Microsoft software developers are currently working on cloud-based solutions, and he expects that number to jump to 90 percent within a year. Microsoft is already delivering the cloud in the form of Business Productivity Online Suite (BPOS), which includes hosted versions of Exchange, Office and SharePoint. Future technology will also enable the delivery of private clouds.

Private clouds will employ the same technology delivered in Microsoft's recently released Windows Azure and SQL Azure public cloud services. The difference is private clouds will let partners deliver what Microsoft is calling a "cloud in a box" for organizations that want to host data on-premises as well as using a hybrid of hosted services.

 Microsoft CEO Steve Ballmer

"We need to permit the private cloud," Ballmer said. "The kinds of things we're doing with Windows Azure are about making sure there's a public version and there's a customer version, and there can be a government version, all based on the same core technology."

But even stakeholders in Microsoft's success are acknowledging that will be easier said than done. "Certainly it will be good when enterprises can buy that much compute power in a container and have it hauled up to their building and plugged in, but we shouldn't trivialize some of the complexity there," says Tyson Hartman, CTO of Avanade Inc., a solutions provider that's a joint venture of Accenture and Microsoft.

"How will it be managed, how will it be operated, how do you get visibility to it? Are you managing it? Are third parties managing it? I think there are a lot of issues," Hartman says. "It looks neat and sounds really awesome, but practically, there are a lot of issues to work out."

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.


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