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Ray Ozzie and the business of clouds

• Rory Cellan-Jones
• 28 Oct 08, 10:30 GMT

Is there anyone out there who feels neutral about Microsoft? When I interviewed Steve Ballmer last month, an old friend argued that my encounter with Microsoft's chief executive was a complete waste of time. The friend - he's the kind of guy who writes "Micro$oft" - believes that Mr Ballmer's business is increasingly irrelevant to the future of the internet, left in the dirt by the likes of Google.

So I'm expecting a lot more flak from that direction over our coverage of Microsoft's move into cloud computing, and our interview with Ray Ozzie. But I make no apologies for covering a major shift in strategy by what is still an incredibly powerful and important company, What's more, Mr Ozzie is a serious figure, the creator of Lotus Notes, and a quiet, but passionate, evangelist for Microsoft's cloud strategy.

Whether his cunning plan will work is another matter. Microsoft is hardly the nimblest of companies and others - notably Amazon and Google - are ahead of the game. When I met Ray Ozzie shortly after the keynote where he unveiled the Windows Azure platform, he was keen to differentiate between Google and Amazon as potential competitors. He said it was Amazon that had been the real pioneer, insisting that Google just wasn't in cloud computing.

I pointed out that the one cloud application with which I was familiar was Google Docs - in fact, this blog post is starting life as an online Google document. But it turned out we were looking at the cloud from different sides. Mr Ozzie was focussing on it as something you rented out to businesses so they could use the vast computing power in your data centres to create applications which could scale up in a hurry - an approach where Amazon is enjoying plenty of success. I was thinking of the cloud as a place where millions of users could store their data and use simple online programmes, mostly for free.

You can see why Microsoft would be keener on the former interpretation. It involves creating a new business of a traditional kind, where business customers pay you real money for a service.

Whereas offering online services to consumers - which, to be fair, Microsoft is doing through Live Mesh - is tricky to turn into a profitable enterprise, and could cannibalise your existing business. Do you really want to start pushing the idea that software can be free, flexible and supported by advertising, when you're still reaping huge profits from Office?

(Mind you, I have a hunch Microsoft may be planning some kind of cloud version of Office, because when I suggested something of the kind to Ray Ozzie, he prevaricated, as if an announcement were imminent.)

Microsoft certainly appears to be taking its cloud venture seriously. In Los Angeles it felt like a small army had been working on "Azure" for years, where as Sam Schillace of Google Docs boasts that his entire team costs about the same as the cafe where they eat. Mr Schillace feels that's an advantage, claiming that nimbleness, openness and velocity are the watchwords of the cloud era. Microsoft believes its superior firepower in the enterprise world, where as Ray Ozzie put it "most major companies don't want software updated every day" will give it the upper hand.

Last month Steve Ballmer described Microsoft as a David in search compared to Google's Goliath. Now, in the battle of the clouds, the Goliaths of Redmond seem to have decided that Google isn't even in the game.

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