Microsoft's Huge Cloud Problem

Recently, I had a Twitbate (Twitter Debate) with a Silicon Angle Analyst
and few other members of Clouderati about the Microsoft’s position with
respect to the Cloud. The general discussion centered around whether
Microsoft can be successful in the Cloud game or not. The opinions
ranged from a outright dismissal as non-starter to a possibility of
replicating their success from the traditional desktop era. It is fun to
be part of the Clouderati these days with many interesting discussions
on topics related to Cloud Computing. I thought I will do a post on my
take about Microsoft and explain the reasoning behind it. It will be a good
discussion if readers of this blog jump in and enrich
everyone including me.



Microsoft, after trying so hard to dismiss the idea of Cloud Computing
as a plain hype, jumped right into the game with announcements about
Windows Azure at the last year’s PDC. They followed it up with an announcement
about Office 2010 and its SaaS component. At the moment, they appear to
be serious about the cloud game but the question is whether they are
really serious and even if they are serious, can they
win big. In my opinion, Microsoft under Ray Ozzie has clearly
understood that the ground under them is clearly shifting and if they
don’t make a jump now, they may end up going down the hole. They are
serious about the cloud game but they are confused and not confident
about how to execute. I really want them to win in this game but it is a mammoth
task for them to even make a small impact. Whether they can survive the
onslaught of competition and make it big, only time can tell us.



My opinion about them is shaped by various factors and I will list them out below.

• If Microsoft has to go aggressively on the Cloud market,
  it has to fight against its own core business. Whether it is the
  office apps or Windows Azure, the losing player is also Microsoft. In
  fact, both the OS and Microsoft Office are the cash cows that made
  Microsoft a powerful player in the software industry. So, the only way
  Microsoft can be a dominant player in the Cloud game is by committing
  suicide.
• To win the cloud game, Microsoft has to embrace openness
  to its fullest. From open source to open formats to open architecture
  to interoperability to data portability, Microsoft has to take a
  leadership role on openness. Knowing Microsoft’s positions in the past and
  their reluctance to embrace wholeheartedly even now, I don’t see it
  happening anytime soon. Some people who like Microsoft tend to point
  out to Microsoft’s involvement in PHP for Windows and how they wrote
  drivers for IIS and MS SQL. But, for me, it is not openness. Making
  successful third party platforms to work under one’s own environment is not
  openness. It is just plain old greed. Openness is about letting their
  own platform to work flawlessly in third party environments. I am
  pretty convinced that Microsoft will never do this. Wake me up when
  Microsoft ports .NET platform natively to Linux. Ah, please don’t point
  out to Mono. I know about Mono project and it is not my point.
• People are betting on .NET platform with Azure. On a
  normal day, I would have agreed with it. But cloud is different. Two
  points makes .NET’s success unlikely in the clouds.First, cloud is an evolution from the web and
  .NET was never a platform of choice in the web. Second, for the first
  time in the history of computing, we are seeing the consumerization of
  enterprise platforms and applications. It is just a matter of time
  before we don’t see a gap between consumer web and enterprise web.
  Microsoft .NET could never get traction on the consumer web, partly due
  to the exorbitant costs involved. Probably, we may see a large scale embrace of
  .NET based apps on Azure cloud but I am not all that convinced that
  history will repeat itself here.
• Microsoft is too “fat” to play the cloud game. The
  success of cloud is largely due to the economics of offering no
  CAPEX/low OPEX options. If Microsoft has to align its business with
  this kind of economics, they need to have low overhead and be agile.
  With a workforce of 75K+ (or is it 90K+?), it will be very difficult
  for Microsoft to compete in the clouds. They need to shed a huge chunk
  of their fat and doing so will lower the company morale big time, to
  effectively compete against the likes of Amazon and Google.

Even though I hated Microsoft in the desktop era due to my open source
allegiance, I sincerely want Microsoft to be a big player in the
clouds. In fact, I like the Azure model from the developers perspective. However, their initial reluctance to jump into the cloud game early
on to gain the first mover advantage plus the above factors makes it
difficult for Microsoft. With some amount of reprioritization and fat
shedding, they can be a compelling player but they can never have the
monopoly marketshare they once enjoyed in the desktop market.