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Friday, May 28, 2010

Microsoft: "We're all in" but our partners don't have a cloud computing strategy

2:14:00 PM Posted by Oscar Berg No comments
The cloud computing hype has just peaked, but behind the hype is a real a paradigm change in how software is distributed. Enterprises are moving beyond the firewall and they are doing it faster than most have predicted.

For business users, SaaS is just a click away. If you look at it from their perspective, SaaS presents a way to bypass a reactive or passive IT department that hardly ever delivers what they ask for, and certainly not when they need it.

A couple of weeks ago, I listened to a business developer from Microsoft talking about their "We’re all in” cloud computing strategy. The strategy basically means that they will move their entire product portfolio to the cloud. Their offering will extend beyond SaaS and include both PaaS and IaaS.

To me, Microsoft’s sudden “We’re all in” cloud computing strategy breathes a similar kind of desperation as when Bill Gates in 1995 declared Internet to be “crucial to every part of our business” and “the most important single development to come along since the IBM PC was introduced in 1981.” They had suddenly realized that they had no Internet strategy and that the Internet was going to change "everything". (If you don’t remember, then spend a few minutes reading his mail to Microsoft employees in this This Day in Tech article)

Microsoft believes cloud computing will radically change their current business model, a business model which is based almost entirely on selling licenses for on-premise desktop and server software. In this sense, they have a very dramatic journey ahead of them compared to competitors such as Google and Amazon who started their businesses in the cloud. At Microsoft, they also recognize that they face a big challenge in transforming their business and making sure that their own people understand what this change means. So, what does the “We’re all in” cloud computing strategy mean for Microsoft’s partners and their current business models which relies heavily and sometimes entirely on implementing on-premise software from Microsoft? Well, very few have even tried to answer that question. According to Microsoft, only 5% of their partners have a cloud computing strategy.

For enterprises, cloud computing will be just as much about improving business agility as about reducing TCO. Being able to only pay for the capacity they need when they need it will likely reduce TCO, but I'm convinced that the biggest potential business value lies in the possibilities for an enterprise to get access to the capabilities they need much faster than they can without cloud computing. Every enterprise struggles with this today and constant failures to deliver the required capabilities have created a gaping void between the business and the IT department. That is why we can be sure that any remaining concerns about cloud computing, such as security and identity management, will be solved. The business drivers for cloud computing are just too strong to let things like those be seen as anything more than pebbles on the road.


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