Microsoft's Ray Ozzie Has His Head in the Clouds
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"Eventually, everyone will have part of their organization in the cloud," Ozzie, Microsoft's chief software architect, told a group of financial analysts today at the J.P. Morgan Media and Telecom Conference in Boston.
Of course, Ozzie and Microsoft (NASDAQ: MSFT) intend to be ready when that time comes. For one thing, the company is pushing hard on efforts like its emerging Azure cloud services platform, which it positions as a way to help corporate IT shops concentrate on more important areas of their businesses than maintaining their datacenters and software.
"Enterprises are being offered the choice of what things have the most strategic importance," he said. Businesses are challenged to determine what is "infrastructural," and thus can be provided by third parties, he added.
"Why do I have to manage my e-mail structure?" Ozzie said.
Microsoft first demonstrated Azure last fall and the technology is currently in a community technology preview, with a delivery date planned sometime in the second half of this year.
Despite the coming of Azure, Ozzie acknowledged that it will be a while -- perhaps years -- before cloud computing makes significant inroads with enterprises.
But Ozzie said Microsoft has a plan for Azure in the meantime. Growing popularity of consumer services will lead the way, followed over the years by corporate services as enterprises gain a comfort level about services in the cloud.
"We have half a billion [consumer] users between Hotmail and Windows Instant Messenger," he said.
The nearly legendary creator of Lotus Notes, Ozzie joined Microsoft in 2005 when it bought out his latest startup company, Groove Networks. In 2006, he took over the role of chief software architect from Microsoft's co-founder and chairman, Bill Gates.
Since he's been at the software giant, Ozzie has championed the "software-plus-services" concept that Microsoft will continue to thrive over coming decades by evolving into a company that provides services online -- in the cloud -- that tie back to its software on the desktop, server, and mobile devices.
It won't be easy, he admits.
During today's conference, Ozzie didn't ignore the fact that Microsoft has competitors, naming Google (NASDAQ: GOOG), VMware (NYSE: VMW) and Amazon (NASDAQ: AMZN). However, he still sees Microsoft as the horse to bet on.
"In the next year or two, I believe that the biggest opportunity [in cloud services] will be in Exchange and SharePoint," he added.
Ozzie highlighted five areas -- experience, technology, partners, developers, and customer base momentum -- where he feels Microsoft has an advantage over competitors. Of course, it doesn't hurt that Microsoft can provide both the system platform and the applications that run on it.
"That's why we call it [Azure] an operating system for the cloud."
Yet it's not a game that Microsoft expects to win overnight. Ozzie repeated what CEO Steve Ballmer has often said -- that the company will continue to invest for the long term on initiatives like the cloud.
"We're investing with a 20- or 30-year commitment," he said.
As an example, Ozzie cited Microsoft's current initiative to open datacenters to support cloud computing, both for consumers and enterprises, around the world. However, as it can't afford to build datacenters in every country, it will need to have partners in some nations.
But for the present, Microsoft has its work cut out for it -- and that includes contending with some recent shifts in the operating system landscape.
For one thing, Intel (NASDAQ: INTC) this week said it's planning a netbook version of Linux, called Moblin, that's now in beta testing.
But Ozzie dismissed the suggestion that Intel intends to compete with Microsoft.
"We work with Intel very closely, but we also work with AMD ... we have a very good relationship with [both of them]. Any large company has to look at the future," he said.
As to what Microsoft's had learned from the lackluster reception of Windows Vista, "I think the biggest 'learning' was about over commitment," Ozzie said.
Ozzie also told the analysts that the current economic downturn is a "blessing in disguise" because it will force Microsoft to simplify in many areas.
"I believe Microsoft will come out the other side as a much stronger company," he said.