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Microsoft's cloud strategy

John Gallant, IDG Enterprise, and Eric Knorr, (Computerworld US) | Oct. 11, 2010
In-depth Q&A: Microsoft's Bob Muglia details cloud strategy

We want the features. But you put all the burden on us. You put all the operations costs on us. You make us do all the work. I want you to handle that. I don't want to take care of it.' That's really the key to software as a service and the cloud all around: how we can provide the services to our customers and then keep them up-to-date. We can keep the value associated with the new technology flowing into the IT organization, into the company, and, thus, generate the business value. But they don't have to pay all the cost and have all the training and everything.

Do you think there's the potential for any surprise or risk for them? Could cloud end up costing them more over time?

Well, there's always [that] potential. I'm sure there will be cases. But I think, in general, it will really be transformative to enabling businesses to focus more on what they can add value to. That's part of the promise of the cloud, that the customer can focus on their business and adding value through IT and things that make a difference to the business versus the things that they have to do now that are not differentiating. Customers are able to achieve a larger focus on the things that enable them to differentiate.

There will be problems. There will be failures. There have always been those things. Throughout all of the history of IT, whatever promising new technology comes in brings with it some set of challenges, but it also advances things. Because of the focus on the business and business results [with cloud], the net benefit will be substantial.

Going back to the licensing, how does Microsoft navigate that change?

The model has been that you gather together a bunch of new features and new capabilities into a new release, which has big revenue associated with it. Now people are going to expect these features to just become part of the product to which they subscribe. Well, it's actually great for us, because our biggest competition with our new product releases is always our old product releases. We still have a lot of XP. XP is pretty much still ruling the world and we're seeing people now move to Windows 7. There's Office 2003 and Office 2007, and we've shipped Office 2010. That's always been our biggest challenge, the complexity customers have associated with moving forward is an impediment to our being able to license them new software.

The cloud will eliminate that because it's our job to move them forward. We'll deliver a service to a customer that is evergreen. It's always up-to-date with the latest set of features. We need to provide customers with some level of control. I mean we don't want to update a retail customer from just before Thanksgiving until after Christmas. But we will commit to keeping and maintaining the software for the customers, one of the main differentiators.

 

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