Cloud is ‘significant and disruptive’ IT trend: Microsoft

3 Jun 2010

Microsoft restated its commitment to cloud computing at the launch of its latest Office 2010 and SharePoint 2010 products in Amsterdam, but the company believes customers will ultimately want the choice of where their documents are stored.

“Seventy per cent of engineers at Microsoft are working on cloud-based technology and in a year’s time, 90pc will be devoted to it. We’re all in – we’re completely embracing the cloud,” said Stephen Elop, president of Microsoft’s business division, at the launch.

Some commentators position cloud technology as a threat to traditional vendors like Microsoft, which have built up a legacy of software installed on users’ own PCs. Others, such as Oracle’s Larry Ellison, have been openly dismissive of the cloud in the past. Elop dismissed those suggestions, calling the cloud “the most significant and disruptive” trend in IT.

“For me, the cloud is a revenue and profit-growth opportunity,” he countered. “Previously, we were providing software to customers. Now we’re not only providing the software but also the services and infrastructure and everything that goes around that, so we’re able to participate in a larger share of our customers’ budgets than we did before.”

Savings from the cloud

According to Elop, customers can expect savings of between 10pc and 40pc to run email or collaboration tools from the cloud. “This is positive for us financially and positive for customers financially and in terms of the experience for end users it’s at a higher degree of reliability than anything else,” he said.

Some 8.6 million people downloaded Office 2010 while it was in beta format, three times as many as did that for Office 2007. “It relates to the fact that we focused on cloud computing,” said Elop, citing companies such as Kraft General Foods, Coca-Cola Enterprises, Starbucks, McDonald’s, Novartis and GlaxoSmithkline as being among the early adopters.

Microsoft sees its role as helping customers to “move from the old world to the new way” with minimal disruption. “We’re not saying to our customers ‘it’s the cloud or nothing’. It’s whatever combination that makes sense for them,” said Elop.

Richard Moore, head of Microsoft Ireland’s information worker division, took up Elop’s theme, stressing the importance of document fidelity – the consistency of formatting between desktop and cloud software. “Web apps shouldn’t be a simpler, lighter companion. A document should look the same whether a customer opens it in a browser or when they created it (in the software).”


Moore also highlighted the growing importance of collaboration as a way of working. Typical tasks for information workers could include anything from building websites and creating content to using search. “Office, more than ever, is glued at the hip to SharePoint for business users,” he said. “With SharePoint, the intention is to use one product to do a lot of tasks where you would have to have used multiple products before.”

Elop also looked to reassure customers about security concerns around cloud computing. “Security is one of the key questions we get asked about. We’ve made sure international security standards are fully applied for our customers is there and that the degree of security we’re able to provide surpasses anything a particular customer could do for themselves,” he said.

He also referred to Microsoft’s data centre located in Dublin, which will host many of the cloud services for customers. The site was deliberately chosen in order to comply with European data protection rules, said Elop.

Gordon Smith was a contributor to Silicon Republic