Analysis: Microsoft’s Ballmer Explains the Cloud

In a speech to the student body University of Washington, Microsoft CEO Steve Ballmer elucidated the promises and perils of the cloud, shedding some light on Microsoft’s cloud strategy.  Gizmodo’s got the blow-by-blow – here’s a recap and our take.

Ballmer opened the talk by reminding the audience that the cloud is a $3.3 trillion industry, and that Microsoft (and the rest of the industry besides) is banking its future on it. He then went on to break his views in the cloud down to five key principles.

Cloud computing according to Ballmer:

1. “The Cloud Creates Opportunities and Responsibilities.” Basically, what he means is that you no longer need to come from a huge developer to get your work in the hands of the masses, with the caveat that the developers remember the cloud is supposed to give users more control, and provide the appropriate privacy considerations.
2. “The Cloud Learns and Helps You Learn, Decide, and Take Action.” What Microsoft is trying to do, Ballmer says, is teach the cloud how to pick out information more intelligently, either on its own or in collaboration with users. As an example, he pointed to Bing Maps‘ newly-live “explore” feature.
3. “Cloud Enhances Social and Professional Interactions.” Ballmer thinks that social cloud innovation will go far beyond Facebook and LinkedIn, towards an ever-enhanced collaboration experience.
4. “The Cloud Wants Smarter Devices.” As Gizmodo (and every other observer) has noted, this is a huge break from Google’s thinking, which holds that the device is just a dumb terminal to access the cloud. Ballmer’s logic seems to be that processing power is cheaper than bandwidth, so it’s more cost-efficient to have the computing done on the consumer’s end.
5. “The Cloud Drives Server Advances That Drive the Cloud.” Microsoft has a huge server business. The bigger Microsoft’s cloud gets, the more servers they have to put in. The more servers Microsoft puts in, the bigger and more robust the services they can offer.

The VAR Guy’s take: Microsoft’s approach to cloud computing is unsurprising, given their obvious strong roots in the traditional PC. What this means is that in one corner, we have Microsoft, which is banking that the desktop will never go out of style, and in the other, we have Google, which says that it already has.

Personally, I think Microsoft’s position reeks of old thinking. But I also think that the market can support both Windows Azure and Windows Server 2008 — for a while, at least.