Microsoft Stakes Its Place In The CloudMicrosoft Stakes Its Place In The Cloud

We're going to look back at this era and wonder how we did without this other kind of computer in the cloud."

That's Microsoft chief software architect Ray Ozzie, in an interview with information, just after Microsoft laid out how its most important products--Windows and Office--will change to stay relevant in "the cloud," where a lot of business computing is done outside a company's own data center.

Microsoft is creating Windows Azure, an operating system that will let companies run Windows applications and store files and data using Microsoft's data centers. It's also promising the Azure Services Platform, services that developers can use to establish user identities, manage workflows, synchronize data, and perform other functions as they build software programs on Microsoft's online computing platform.

The next version of Office will offer a browser-based option so users can read and edit documents online, as well as the ability for users to collaborate using Web, mobile, and client versions of Office. "It's not an adjunct, it's not a little thing off to the side," Ozzie says, promising that Office 14 will have "software plus services" at its core.

After two years of touting software plus services, and dribs and drabs of unimpressive product details, Microsoft's broad vision is welcome. Ozzie's right--an era is ending, one dominated by on-premises software. But his vision didn't come with a delivery date. When will Microsoft deliver cloud computing products, and will it come in time for Microsoft to retain its software industry leadership?

Microsoft isn't a leader in the cloud. That status goes to companies such as Amazon.com, Google, and Salesforce.com, which are further along in delivering what's coming to be known as cloud platforms or "platforms as a service." Salesforce lets developers build and sell applications on its online platform, and its Dreamforce conference this week will draw thousands of developers from big companies and startups. Google already offers online documents and spreadsheets, and encourages developers to build features for those and other online software, using its Google App Engine.

Amazon Web Services is selling server computing power and storage, for which it recently added business-friendly reliability guarantees. Even Ozzie acknowledged Amazon sets the standard, saying in his keynote address last week at Microsoft's Professional Developers Conference that "all of us are going to be standing on their shoulders."

Businesses are only starting to figure out how they might move more of their computing into the cloud, so Microsoft--and other big vendors with fledgling cloud initiatives, such as IBM, Oracle, and Sun--may have time to get it right. Companies aren't convinced cloud providers have solved all the problems of security, data control, reliability, and latency. "This is why you should put your toe into the water," Ozzie says. "It's not a panacea, and it's not something people should fear."

Cloud computing promises to cut operational and capital costs and, more important, let IT departments focus on strategic projects instead of keeping the data center running. The current downturn could increase the cost-cutting appeal.

Two tech companies that have tested Azure show how Microsoft's cloud might be used by early adopters. Infosys has created an auto industry "integration hub" using Azure's SQL Server database services for dealer-to-dealer information sharing and Web mashups. Infosys principal architect Jitendra Pal Thethi says the India-based service provider plans to build other business-to-business hubs using the same approach. ERP vendor Epicor last week demonstrated an application that extends ERP search capabilities to mobile devices via Azure services.

Ozzie says he expects enterprises to begin using Azure directly to host Web applications, and eventually to experiment with which enterprise apps they can build and host there. But Microsoft hasn't approached many companies yet, even as beta users. "Now, we can begin to have the conversation with IT," Ozzie says.

Today's cloud computing competition, at least for companies that fancy themselves "platforms," will be for developers, getting both startups and big software makers to build applications that run on their clouds. Microsoft is courting them--it announced Azure at its Professional Developers Conference--but it faces some obstacles.

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First, Microsoft has been working toward these announcements since 2005 but won't commit to a release date--or even a release year--for Windows Azure and many of its related services. A test version of the cloud OS was made available last week, but Microsoft won't even have a timeline for Azure's release until next year. "We just don't know," Ozzie says.

Second, pricing and packaging are unclear, making it difficult to lure startup software developers when offerings such as Amazon's EC2 and Google App Engine have simple pricing plans they can build a business plan around. Microsoft says Azure's pricing, like rivals', will be based on usage and service-level agreements. Ozzie promises "competitive" pricing.

SHORT ON DETAILS, BIG ON DATA CENTERS
Still, Microsoft offers developers some compelling details. It can leverage a massive installed base and a large following of developers skilled in writing apps for Windows. It has enterprise credibility, more than can be said for Amazon and Google. And it's spending billions of dollars on new data centers, which Deborah Chrapathy, Microsoft's global foundation services VP, says are built to handle "hundreds of petabytes of data reliably on a regular basis."

Microsoft also will make individual Azure Services Platform components available separately from Azure itself and from one another, letting developers use pieces of Azure to build component apps. "It's not a monolithic platform," says Amitabh Srivastava, Microsoft's cloud infrastructure services VP.

Azure relies on standard Web protocols like REST and Atom to make it easier to interconnect with other systems. Initially, developers will be able to write only .Net applications in Visual Studio and upload them to Azure, but Microsoft says Eclipse support and the ability to run Ruby and Python applications will come later.

DISTRIBUTED OS, WITH SERVICES
At the lowest level, Azure is a multitenant, distributed operating system where people can run apps and store data. One level up, Microsoft plans to offer associated services. SQL Services will offer some database features, eventually including the ability to host a relational database in the cloud. .Net Services will offer access control, workflow logic, and a service bus. The Live Framework includes data synchronization via Live Mesh and a development platform in the Live Operating Environment and APIs.

Microsoft also envisions a new way to federate identity between Live ID and Active Directory. Companies would download a small piece of software called the Services Connector that would let Live ID recognize employee e-mail addresses when they log on to a cloud service, and validate the addresses and passwords against a company's on-premises directory. Companies could give partners and customers access through Live ID instead of adding them to the company directory. Microsoft and other vendors need to make it easy to connect to the cloud, and features like federated identity help.

Microsoft plans to run its existing SaaS applications--including Exchange Online, SharePoint Online, and CRM Online--on Azure. Those apps are the hardest evidence Microsoft is moving beyond on-premises software; Office chief Chris Capossela predicts that 50% of Exchange mailboxes will be online within five years.

But an online version of Office will be the biggest test of Microsoft's commitment to the cloud. Ozzie says it's built on the premise that, for two people to collaborate, they don't need to know if the other is on a Web, desktop client, or mobile client version of Office. "That was a very significant pivot very early on," he says. The collaboration features will use Microsoft's Live Mesh to synchronize content.

Microsoft also intends to develop apps specifically around Azure. A project called "Atlanta" would connect to an on-premises System Center deployment, transmit data back to Azure and SQL Services for analysis and anonymous comparison with other users, then present scorecard data via a portal.

LATE TO PARTY
The cloud computing party may just be getting started, but Microsoft's fashionably late.

It has taken Amazon two years of testing to remove the beta label from its Linux-based Elastic Compute Cloud utility computing service, a step the company took two weeks ago. With that, Amazon introduced an EC2 service-level agreement, which it already had on its Simple Storage Service. And it began a beta test of EC2 on Windows, beating Windows Azure to the punch. Amazon doesn't yet offer the plethora of identity, database, and .Net services that Microsoft's promising. But it has real cloud products and counts National Geographic, Nasdaq, and Eli Lilly among its customers.

Google's slate of Web services includes productivity and collaboration applications in Google Apps and a cloud platform in Google App Engine. More than 1 million businesses have signed up for Google Apps, but many of those hang onto Office. The city of Washington, D.C., for example, offers Google Apps to all employees, but they can use Outlook and Office as well. "I don't necessarily see this supplanting Microsoft," says D.C. CTO Vivek Kundra, who's generally gung ho about Google Apps. "There's a place in the enterprise for Office."

Salesforce's Force.com platform as a service is today focused almost exclusively on add-ons to its CRM service. Only a few companies, such as startup Appirio, are building apps on Force.com not tied to Salesforce CRM.

IBM's Blue Cloud utility computing platform runs Linux and soon System z mainframe apps and uses IBM Tivoli for management and monitoring. Customers include the European Union and a "very large U.S.-based investment bank" that runs a risk management app on the platform. IBM also offers some collaboration apps as services, from Bluehouse social networking to Lotus Notes e-mail.

Other vendors are moving into the cloud, including hosting company Rackspace and a few dozen startups. So Microsoft needs to pick up the pace of development. As cloud computing becomes a real service option for more companies, its customers will require more than the grand plan; they'll need the details that make it real.

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