Ray Ozzie, Microsoft chief software architect, detailed Microsoft's embrace of cloud computing Thursday and also endorsed the concept of netbooks -- provided they run Intel x86 processors and Windows.
Perhaps best known for his pioneering development of Lotus Notes and as Bill Gates' replacement at Microsoft, Ozzie was the guest speaker at a meeting of the Churchill Club business and technology forum in Palo Alto, Calif.
In addition to the cloud and netbooks, Ozzie briefly touched upon a number of topics, saying, for instance, to expect Microsoft to do the "right thing" regarding support of the critical HTML 5 standard, although he was not specific about what that right thing might be. Ozzie also described as "too complex" the new Google Wave tool for online collaboration and communication.
While Google Wave is nice technology, "It violates one principle that I hold so true right now, which is complexity is the enemy in the ethos of the Web," he said. He likened Wave to the Groove office software from Groove Networks, which Ozzie founded and was bought out by Microsoft.
Cloud computing, the main topic of the discussion, harks backs to the days of timesharing and utility computing and "is nothing new," Ozzie said. "The pendulum is swinging back," he said.
But the cloud is fundamentally transformational now that there are ubiquitous high bandwidth, storage and computation access, and inexpensive devices. User experiences can be transformed, he said. "[Cloud computing] can really be anything we want it to be," Ozzie said.
Microsoft is working on its Windows Azure cloud platform, which is in a pre-release phase in low levels of service. Commercial availability of low-level services is due soon.
Microsoft will offer its own cloud-based applications in a common infrastructure. The company plans datacenters around the globe and partnering with different companies, such as telco firms, to federate their cloud infrastructure with Microsoft's.
Despite Amazon's status as a leader in cloud computing, Amazon may not be able to participate in the cloud-building game like Microsoft, according to Ozzie said. "They are the leader, they've done amazing work, but the level to which you need to build this out to serve at least enterprise deployments is substantial," he said.
Microsoft has gained core competencies in building cloud services by investing in MSN since 1995, he said. The company has several primary advantages in cloud computing, Ozzie said. These include operating system technologies and skills; storage investments because of its search capabilities; an edge with developers; enterprise advantages; and consumers, he said.
"Between 5 million to 7 million developers are actively working [with] the Microsoft stack in one way, shape, or form and today those are the people who are more or less the market opportunity for us," Ozzie said. But the market opportunity actually is broader than that, with open source developers and partners able to leverage the cloud, he said.
Microsoft has an advantage with enterprises, he said. "Eighty-six percent of all enterprises, all companies of any size, even midsize and up run Active Directory. That means their users are provisioning in Active Directory," said Ozzie. "It's one button for us to federate those to the cloud."
Cloud computing presents a "huge revenue opportunity," Ozzie said, although the margins on services are not as high as the margins on packaged software.
Microsoft sees three classes of devices being connected to the cloud: PC, phone, and TV.
While endorsing the proliferation of netbooks, Ozzie said, "The reality is, I don't know what a netbook is. ...A netbook is evolving into an expensive application a PC. It's a laptop, he said." Microsoft can sell OSes and applications to netbook users, said Ozzie, but Microsoft will put Windows on netbooks using Intel x86-based processors not ARM systems, Ozzie acknowledged.
Asked if Microsoft planned to support HTML 5 on Internet Explorer, Ozzie said that although he had no announcements to make, the company is committed to offering a world-class browser. "I think you can expect us to do the right thing," he said. Other browser makers such as Mozilla pledge support for HTML 5, which expands video capabilities.
In other remarks, Ozzie said that although Gates is not physically at the company, he does write and calls infrequently on things he is interested in. "He knows that he's not accountable for our success anymore, therefore he knows not to give orders or directives or influence things that would blow the accountability of being able to deliver something."
Gates brought a culture of crisis to Microsoft, Ozzie said, pervaded by fears that any day now, two guys in a garage will take down the company.