Cloud Computing’s Unlikeliest Supporter

Cloud Computing’s Unlikeliest Supporter

“Keep your friends close and your enemies closer.”
– Sun Tzu (544 BC – 496 BC), Chinese military general, strategist and philosopher.

Sun Tzu is widely considered as the best military strategist who ever lived. Even today, 2500 years after he wrote The Art of War, his book is the most widely read and quoted of all military tomes. Now, the Microsoft think-tank may have taken a leaf out of it in its disproportionate confidence in cloud computing.

The latest effort in this strategy is the launch of Office 365, grandiosely described by Kurt DelBene, president of Microsoft Office as “the best of everything we know about productivity, all in a single cloud service” (A Step By Step Guide To Microsoft Office 365 – InfoGraph).

As per the press release, Office 365 is designed to target both ends of the customer spectrum – “your local bakery can get enterprise-caliber software and services for the first time, while a multinational pharmaceutical company can reduce costs and more easily stay current with the latest innovations.” With Office 365, businesses are assured time to focus on business, while Microsoft and its partners “take care of the technology.”

With this move, Microsoft has shown that it has put its money where its mouth is, having announced three months ago its intention of spending 90% of its research budget on improving cloud computing technologies. Since Microsoft’s annual R&D budget this year is $9.6 billion, this investment translates to a massive $8.6 billion.

While I had speculated that perhaps some of that money should be spent on its Office suite and Windows OS (Is Microsoft Taking A Risk By Putting All Its Eggs In The Cloud Computing Basket? ), there’s no denying Microsoft’s commitment to the cloud, at least now that Office 365 has seen the light of day.

Microsoft CEO Steve Ballmer had also expressed his optimistic view of cloud computing during his visit to India last month (How India Stands to Gain from Cloud Computing ). On that occasion, he had remarked, “Cloud will automate and operate applications quickly so that people can learn and consume information in an interesting manner. It will analyze and take action. In this field, cloud will enable simulation of the physical world in its virtual format. The possibilities of such applications are endless for fields such as biotechnology, medicine, geophysics, chemistry, etc. Cloud will help create, collaborate and share the fruits of such analysis and tests. It will help people in enjoying real-time interactive games and socialize between themselves.”

As of October 2010, Microsoft’s revenue break-up was as follows:

  • Windows & Windows Live: $4.76 billion, up 66 % from $2.88 billion a year earlier (13 % growth when adding deferral).
  • Server & Tools: $3.96 billion, up 12 % from $3.5 billion a year earlier.
  • Business: $5.126 billion, up 14 % from $4.5 billion a year earlier.
  • Online Services Business: $527 million, up 8 % from $487 million a year earlier.
  • Entertainment & Devices: $1.8 billion, up 27 % from $1.4 billion a year earlier.

As is clearly seen, in spite of Business (Office) and Windows, both desktop-based products, constituting 61% of its revenue ($ 9.89 billion of $16.17 billion), Microsoft is investing heavily in the cloud. While that may be an effort to convert a threat into an opportunity (Cloud Computing – Threat or Opportunity? Part 1 ), it does make Microsoft cloud computing’s unlikeliest supporter, especially since it has a good chance of replacing traditional desktops and laptops as the personal computing device of preference (Mainframes -> PCs -> Cloud Computing? ).

By Sourya Biswas

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