The software vendor has been something of a sleeping giant on cloud computing. But with Windows Azure and Office Web, it's waking up.
Windows 7 made its public debut at Microsoft Corp.'s Professional Developers Conference in Los Angeles last week. But it had to share the spotlight with two other technologies, both aimed at jump-starting Microsoft's cloud computing efforts.
The company opened the PDC by detailing Windows Azure, a cloud computing version of its operating system that will underlie an application hosting service designed to compete with Amazon.com Inc.'s Elastic Compute Cloud (EC2).
Microsoft also said it's developing a set of applications called Office Web that has lightweight versions of Word, Excel, PowerPoint and OneNote for use in Web browsers. That move is meant to help it fend off competition from Google Apps and other suites of online applications.
"This is the big fish jumping into the pond," IDC analyst Melissa Webster said about Office Web — a comment that just as easily could have applied to Azure.
Microsoft isn't entirely new to cloud computing. For example, it currently offers Web-based services such as Windows Live and Office Live (described as an "online extension" of Office) to individuals and small businesses.
But Windows Azure is being pitched as a platform for moving corporate applications into the cloud. And Amazon has gotten a long head start with EC2.
Ray Ozzie, Microsoft's chief software architect, said that work on Azure began two years ago, just before Amazon launched EC2 in beta mode. Amazon removed the "beta" tag on Oct. 23 and said EC2 was ready for production use. Microsoft, which released a preview version of Azure to PDC attendees, isn't saying when its service will go live.
Ozzie tipped his hat to Amazon for being first. But he said that Microsoft has "somewhat broader and different objectives" in developing Azure than Amazon did with EC2. Microsoft has to continue supporting its global network of software developers, Ozzie noted, adding that they will be able to use the company's .Net tools to build applications for Azure.
Nonetheless, cloud computing will require changes in IT departments. RedMonk analyst James Governor jokingly compared the cloud approach to "wearing your underpants on the outside of your clothes."
Developers, he said, have to expose applications to end users via the Web while still focusing on things such as security and scalability behind the scenes. "This externalization and rethinking the role of IT — it's something that all enterprise organizations are going to have to face," Governor said.
Pitney Bowes Management Services Inc., which handles tasks such as mailing and shipping for corporate clients, is working with Microsoft to test an Azure version of an application for digitizing paper mail.
Terry Doeberl, director of business development at the Pitney Bowes Inc. unit, said one benefit of the cloud model is that it separates applications from the operating system layer, freeing IT from having to update apps on individual PCs.
The same will apply to Office Web, which Microsoft plans to release late next year with the next version of the full Office suite.
The Office Web apps won't have all the features of their desktop siblings, said Chris Caposella, senior vice president of Microsoft's business division. And Office 2007's Ribbon user interface won't be included because it takes up too much screen space. Instead, Microsoft plans to modify the drop-down menus from earlier versions of Office.
IDC's Webster said it's impossible at this point to gauge how Office Web will do compared with Google Apps and other online suites. "But with something like 97% of the [desktop applications] market," she wrote in an e-mail, "Microsoft is certainly the very strong incumbent."
To maintain that wide of a lead, though, Microsoft will have to show that it can keep its head in the cloud.
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