Microsoft is betting the cloud will deliver it and its customers the most opportunities for innovation and development. And according to CEO Steve Ballmer, five key reasons are driving the company's confidence in - and technology strategy for - cloud computing in the coming years.
"For the cloud, we're all in," said Ballmer during an address and live Webcast at the University of Washington's Paul G. Allen Center for Computer Science & Engineering in Seattle. "Literally, I will tell you we are betting our company on it."
In addition to Microsoft's Azure platform, Ballmer said the cloud and its potential is behind Microsoft's technology strategy and that the company, while perhaps behind in some areas such as phones, is with the market leaders when it comes to cloud computing.
"The cloud fuels Microsoft and Microsoft fuels the cloud," Ballmer said. "We have 40,000 people employed building software around the globe, about 70% of the folks that work for us are doing something designed exclusively for the cloud or designed to serve one of the five points I spoke about today. A year from now, it would be 90%. How we are thinking about delivering it really builds from this cloud base."
During the hour-long address, Ballmer detailed the five key dimensions of the cloud driving Microsoft, the first being that "the cloud creates opportunities and responsibilities." That means it provides people the opportunity to create and share content "instantaneously," but also requires a responsibility around privacy and confidentiality. "It is a dimension of the cloud that needs all of our best work in my opinion," Ballmer said.
The second key dimension is around learning, what the cloud learns about the world and about users, bringing data together to enable better decisions.
But the cloud, like many disruptive technologies, is not a static entity, he suggested. "The cloud needs to learn about you and needs to keep learning and figure out about the world that has been described virtually," Ballmer said. "The cloud itself needs to learn, it has to represent the real world and keep getting smarter and better to help me learn."
The next dimension Ballmer detailed involves how the cloud "enhances your social and professional interactions" and enables people to connect on multi-faceted levels.
"The ability to really connect people and help people connect is just beginning to be tapped," Ballmer said.
Using an example of Xbox Live tapping into British television service Sky, Simon Atwell, senior program manager at Microsoft's XBox division, showed how users could virtually watch TV together, interact via prompts and connect socially using the gaming platform, without actually having to be playing games the entire time. While the demonstration suffered from "4,700 miles of geographic latency," Atwell was able to display the experience in part.
"I get this experience that I am doing something social that is more than just playing games. If I want to share my emotions, I can get super excited about the content," Atwell said. "We could be anywhere sharing this experience."
Fourth on Ballmer's list was hardware: the cloud wants smarter devices.
"That isn't to say that we aren't going to continue to do a lot of work on browsers and standards moving forward. When it comes to cloud, the devices you use to access it do matter," Ballmer said. He pointed to the company's Windows Phone 7 strategy and discussed Windows being "at Microsoft the most popular smart device on the planet."
Ballmer said Microsoft is working to get "people, places, content, commerce all front and center for the users, with a very different point of view."
Lastly Ballmer pointed to servers and the cloud as another key dimension prodding Microsoft's focus on the technology area. "The cloud drives server advances, and that in turn drives the cloud," he said.
The cloud will drive many changes such as the amount of data stored and the peak loads on Web sites. It will require hardware and software to scale in various directions and demand rapid deployment of resources required even for just a moment. Ballmer said the cloud will change how software and hardware is designed and managed, but also drive application developers to create apps that can take off in the cloud immediately.
"How do you design apps that immediately make sense of the cloud, that should be deployed instantaneously," he said. "There shouldn't be people babysitting these machines. The cloud drives server advances, but those in turn are starting to drive the cloud itself."