Microsoft and Cloud Math
November 2, 2008
Long day in a city with no consonants. Cruising the goodies in my newsreader, I noticed Todd Bishop’s “Microsoft Faces Uncertain Financial Future As It Looks to the Cloud.” You will enjoy the story here. Mr. Bishop reports that Ray Ozzie, Microsoft’s cloud guru, mentioned thinner margins, which means to me “we’ll make it up on volume.” Then came what for me was the most significant passage in the article:
Those thinner margins could hurt Microsoft’s overall business if cloud computing causes companies to make a big shift away from traditional computer servers. Microsoft’s Server & Tools Business — which sells operating systems, database software and other programs for those servers — has been a financial mainstay for the company. However, Ozzie still sees a big role for those traditional servers inside most companies, even as many applications move online. “People will still run most of their big business systems — the back ends of their big business systems — on premises,” he said.
Two assumptions seemed to fuel Mr. Ozzie’s assessment. First, I am no longer convinced that organizations will want servers “on premises”. The work force demographics favor a more fluid approach to organizing work and the work space. Visit a company run by 20 somethings. What I notice is how few people are working “on premises”. Most of the organizations serve clients and some make things, maybe in a remote land, but the gym shoes and the shirts turn up where they are supposed to be.
Second, I used to think I wanted software on machines I controlled. I moved most of my enterprise software to someone else’s servers, and I just “fired” one service provider and moved data and applications to another server provider more quickly than I could have done this with my own gear. I think other folks will make this shift as well.
The larger question in my mind is, “When.” It is okay to announce new initiative and show demonstrations. Delivering a stable, scalable, reliable product is a different type of work. Microsoft has some housecleaning to do to get Tess’s favorite enterprise software to behave. SharePoint requires certified professionals to do too much manual fiddling to activate basic functions to keep her from growling. Even interface consistency in desktop applications needs work. Some Microsoft professionals have insisted that these are details. That may be true. But if the Azure clouds strike me with a lightning bolt, I will be increasingly difficult to convince that Microsoft can deliver on its promises and make money at the same time. And with the police matter clouding enterprise search, how will that help or hinder the FAST ESP push? There is a difference between announcing and delivering across disparate systems and the cloud when it drifts in.
Stephen Arnold, November 1, 2008
Comments
-
- Subscribe to Beyond Search
Feature archive
News archive
-
