Microsoft's late fixing Windows, but ahead on the cloud

Rumor has it Microsoft is in full retreat on Windows 8 as outlines of a new version emerge, but the company is already a step ahead as we move into a cloud-centric world

According to rumors floated by reliable sources a few weeks ago, Microsoft has finally done an about-face on Windows 8 with a forthcoming version dubbed Threshhold.

Mary Jo Foley reported on ZDNet that inside sources told her two Threshhold flavors would return to a more "traditional" desktop look and feel, with a third version resembling Windows RT -- presumably for tablets. Paul Thurrott chimed in with his own inside dope that not only would the Start menu return, but also Metro apps would be able to run on the Windows desktop. (I can't resist noting that InfoWorld suggested similar changes with our Windows Red proposal seven months ago.)

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Few now doubt that Windows 8 dealt a huge blow to already flagging PC sales and led hardware manufacturers to waste billions of dollars on desktop and laptop touchscreens. You can't really blame Steve Sinofsky's unceremonious 2012 departure on Windows 8, since the numbers weren't in yet, but certainly Steve Ballmer felt the sting. As Woody Leonhard observed in an excellent piece last week, the purge of those connected to Windows 8 has continued.

Despite the Windows 8 fiasco and tanking PC sales, Microsoft's stock rose an astounding 34 percent in 2013. I hesitate to give Wall Street analysts too much credit, but it's almost as if they've factored in the Microsoft potential to thrive as we move into the so-called post-PC era -- though, for the record, I hate that phrase. The PC isn't going anywhere; it's just that there's little reason to buy a new one, and Windows 8 gave people another reason not to. I don't see tablets as PC replacements, and even if they could be, that misses the point. So do predictions that the Android PCs slated to debut at CES this week are a threat to Microsoft.

The point is that the center of computing has already moved to the cloud, and which device you use is becoming secondary to the computing experience. Microsoft, compared to all other members of the old guard, is in the best position to be a huge player in cloud computing. Think about it: Microsoft has the three flavors of cloud computing -- SaaS, PaaS, and IaaS -- covered.

Yes, Office 365 is not SaaS. But it includes SaaS elements such as Office Web Apps and Exchange Online, is sold on a sensibly priced subscription model, and by Microsoft's reckoning at least, has reached $1 billion in revenue faster than any other product in the company's history. The Dynamics CRM offering is also available as a SaaS solution. Why wouldn't Microsoft keep adding SaaS apps that integrate with its existing portfolio?

Windows Azure started as a .Net-centric PaaS play but has evolved to support Java, Ruby, Python, PHP, and even the ultra-hip Node.js. As for IaaS, along with Windows Server, Azure offers Linux, MySQL, Hadoop, all the major NoSQL players, and more. Perhaps most significant of all is that Microsoft has built a bridge between Windows Server/System Center and Azure so that customers of those products can use Azure as an extension to their local server infrastructure.

The challenge for Microsoft is to pull all those cloud offerings into coherent, customizable packages that make sense for customers. Currently, just finding information about them requires surfing dozens of Microsoft websites. Of course, Microsoft partners will need to play a role in pulling together those solutions as well, and as usual there are rough edges in many of Microsoft's offerings that will need to ironed out. But really, who else has a more complete cloud portfolio?

Microsoft's problems with execution, particularly out of the gate, are legendary. But with a wholesale changing of the guard, a more substantive embrace of open source, the rumored commonsense fixes for Windows 8, and even the decision to ditch an awful employee ranking system all make the prospects for the company meeting its future challenges more hopeful than they've ever been. It seems to me that a CEO who can understand the complexity of the issues involved in the transition to the cloud -- the biggest leap in Microsoft's history -- will be a necessity.

This article, "Microsoft's late fixing Windows, but ahead on the cloud," originally appeared at InfoWorld.com. Read more of Eric Knorr's Modernizing IT blog. And for the latest business technology news, follow InfoWorld on Twitter.

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