IDG: Do you think there's the potential for any surprise or risk for them? Could cloud end up costing them more over time?
Muglia: 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.
IDG: 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.
Muglia: 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. That's a huge advantage to us, because our salesforce today spends a lot of time explaining the advantages of the new release and why a customer should go through the upgrade themselves.
IDG: When we talk to readers about cloud, management is always an issue; security's always an issue. Can you talk about what Microsoft is doing to address those big worries about cloud computing?
Muglia: We've invested very heavily in both of those areas for quite a number of years. Let me take them separately because I think the issues are somewhat different.
In the case of management, the advantages and benefits that accrue from the cloud largely have to do with changes in the operational environment and the way things are managed. So, there are some natural advantages from a management perspective. One of the things we are doing is enabling customers to use their existing management tools, like System Center, to help bridge the gap from where they are today into the cloud environment. And so they'll have a consistent set of management facilities and tools and one pane of glass, so to speak, that they can look across both of these environments. In contrast, security is different because you're moving into, in many cases -- particularly a public cloud -- a shared environment.