Ballmer bets big on the cloud

In a surprise speech at Microsoft’s BUILD developer conference, CEO Steve Ballmer laid out what he believes to be the company’s seven main product areas. Some of them are obvious but there are a couple the average user may not have even heard of.

According to Yahoo! Finance, the key product areas outlined by Ballmer are:

• Smartphones (via Windows Phone)
• PCs and tablets (Windows)
• Living room entertainment (Xbox)
• Cloud computing (Windows Azure platform)
• Productivity (Office and Office 365)
• Search (Bing)
• ERP and CRM (Dynamics)

Azure is probably the most surprising inclusion in the list given that it supplants proven money spinners like Windows Server, SQL Server, and System Center. Each of these products, says Yahoo! Finance, net the software giant more than US$1-billion in revenue every year.

The Windows Azure Platform is a cloud-based application platform that allows Microsoft data centres to host and run applications. It provides a cloud operating system called Windows Azure that serves as a runtime for the applications and provides a set of services that allows development, management and hosting of applications off-premises.

Its inclusion is, perhaps, indicative of how aware Microsoft is of competing Software as a Service products like Amazon’s Elastic Compute Cloud (EC2) platform.

Azure has reportedly battled to gain traction, with Ireland being a notable exception. Some 6 000 Azure installations had been made in the country by July 2010. Among these were national airline Aer Lingus and HR locker, a web 2.0 provider of HR solutions to small to medium size companies.

Microsoft’s hope for the platform in Ireland also back up speculation that it is looking to bet big on Azure. From the 6 000 installations in 2010, Microsoft hoped to have 100 000 installations in 2011.

Yahoo! Finance reports that this renewed investment might have come following the replacement of Bob Muglia as strategic leader of Microsoft’s Server & Tools group, of which Azure is component (along with SQL Server, Windows Server, and System Center).

It is believed that Muglia, who served the company for more than 22 years, was replaced following disagreements between him and Ballmer on strategic direction. Yahoo! Finance suggest this disagreement may have centred around the Azure platform.

Ballmer used the rest of his speech to address the topic of Windows 8. Aside from making the now familiar noises about the upcoming OS, “reimagining Windows”, he boasted the swell of interest in the product. Less than 24 hours after the developers’ pre-release was launched, it had been downloaded more than 500 000 times, he said.

He also reminded the audience of Windows’ position as the world’s number one operating system.

According to tech site CNet, his key selling point was the fact that 350-million PCs will ship with Windows this year.

“There is no phone, [no] tablet, there is no operating system on the planet that will sell 350-million units of anything other than Windows 8”, he said.