Ballmer Bets Microsoft's Future On Cloud Computing

Thursday Microsoft CEO Steve Ballmer delivered what was essentially a State of the Cloud address, providing a forward-looking view of what cloud computing will be like for the world in general and for his company, in particular. While much of his talk focused on consumer end-user features like a more interactive Bing Maps and the Xbox gaming console, he also spoke to the future of cloud computing for enterprises.

Describing technology as "the gift that keeps on giving," Ballmer made a commitment for his company to go "all in" for cloud computing.  "This is the bet, if you will, for our company." Cloud computing for enterprises is the act of replacing the computing power in an on-premise data center with computing power delivered by a third-party provider with a vast computer infrastructure that services multiple clients. The customers pay for computing power from a cloud vendor the same way they pay for electrical power from their local utility company.

Microsoft is delivering cloud computing to enterprises by putting its flagship business application suite, Microsoft Office, into the cloud, Ballmer explained in an address from the campus of the University of Washington in Seattle. Cloud computing for the purpose of better collaboration and communication among employees "is one of the core kind of technical ambitions behind the next release of our Office product, which you'll see coming to market this June," he noted.

In January, Microsoft launched the Windows Azure Platform of cloud software and services, the cloud equivalent of Windows Server, which includes Windows Azure, an operating system as an online service; Microsoft SQL Azure, a cloud-based relational database solution; and Windows Azure Platform AppFabric, designed to simplify the connection of cloud services and on-premise applications. Cloud computing is also changing the way enterprises think about how server hardware and software fulfills their computing needs, Ballmer continued. "How we think about everything to do with server hardware and server software now needs to change based on the cloud. The cloud has really driven a perspective that comes from scale."

He spoke of how cloud computing allows enterprises to tap into more computing resources when demand spikes, but relinquish those resources when demand declines, paying only for the compute cycles they use. Increasingly, enterprises will want to use cloud computing to rapidly deploy new capabilities, new functionality, new data and new software releases. Cloud computing will become a major focus for new Microsoft products and services going forward, Ballmer concluded. Today about 70 percent of Microsoft's 40,000 global employees are involved in cloud computing in one way or another, "and a year from now that will be 90 percent."