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Microsoft might be synonymous with desktop software, but the software giant has no intention of being left out of the seemingly unstoppable move to computing in the cloud.
But it's going to make that move in a very Microsoft way, without ditching installable software such as its nearly ubiquitous Office software that earns the company close to $20 billion a year in revenue -- a cash cow that continues despite increasingly powerful free and low-price alternatives, including Google's online only versions of e-mail, word processing and spreadsheet software.
Microsoft is now offering free online version of some of its Office apps -- called Office Live -- and making it easy for users of its just released Office 2010 software suite to work on the same documents online or on their desktop.
But the emphasis remains on the desktop, according to Microsoft's chief software architect Ray Ozzie.
"You should use the cloud for things that are uniquely best for the cloud," Ozzie at a Wired Smart Salon event on Tuesday in San Francisco, singling out sharing spreadsheets with co-workers as an example of something the web is best at. "But the PC is best for power editing."
Ozzie has long been a leader in collaboration software, starting with Lotus Notes in the 1980s and then Groove in the 1990s (later acquired by Microsoft and included in its business collaboration software Sharepoint). Ozzie took over Bill Gates's role as Chief Software Architect and has been publicly pushing the company to integrate the internet into its software to create seamless services for companies and individuals.
Google has been pushing to build its own enterprise business as a way to diversify its business and undermine its rival, touting its online services as a viable option for businesses. Its Google Apps collection of online email and productivity software is free for companies with fewer than 50 employees. Google Apps offers $50 per employee licenses for larger companies or for ones that want a guarantee of uptime or access to an online helpdesk.
On Tuesday, Google bluntly urged enterprises not to upgrade to Office 2010, and instead try its services, saying software upgrades are tedious and companies only have a "few servers to lose."
Even Ozzie knows the web can't be ignored.
"You can't bet against the web," Ozzie said Tuesday at about the same moment Google published its sales pitch.
Microsoft's business customers are already starting to try out moving their e-mail servers to Microsoft's hosted versions in data centers, so that they don't have to worry about uptime and maintenance of servers, according to Ozzie. Microsoft now has rentable cloud computing centers that offer online versions of its server and database software, and the company used that infrastructure to power Docs.com, its recent partnership with Facebook, using the power of a data center to handle the spikes of traffic that Facebook can drive.
But he noted that browsers still don't have the power of desktop applications.
"Google itself found the browser wasn't sufficient," Ozzie said, referring to Gears -- a plug-in that gave browsers the ability to store files on the desktop and get some additional computing power. Google has since abandoned that effort, as Firefox, Chrome and Opera have gotten a bit more of those abilities.
Google is now pushing HTML5, the newest version of the web's lingua franca, which it eventually hopes will allow web developers write websites as if they were applications -- meaning they could compete with the ones for sale in mobile phone marketplaces like Apple's app store, and the tradtional software Microsoft sells to individuals and businesses. But HTML5 isn't yet powerful enough and is not a "panacea" for competing with native applications, according to Ozzie.
Ozzie hinted that the future for Microsoft isn't in migrating everything online a la Google, but in learning design lessons from Apple, which has won the hearts of millions by making devices simple but powerful (e.g. the iPod, iPhone, iPad and its desktop operating systems).
"When people are annoyed by the PC, they are annoyed by the management costs of it," Ozzie said. "We want PCs to feel more appliance-like."
Microsoft calls its approach "three screens and a cloud," referring to its web services and desktop software on a PC, a mobile phone and your television.
"We are moving to a world of appliance-like computing," Ozzie said. "The Office team is selling productivity, not software."
At $500 per person for the Professional edition -- ten times Google's top rate, Microsoft needs to make those services very good -- dare we say iPad and Gmail good -- if the company plans to keep being the goto software company for businesses and home users alike.
*Photo: Microsoft's Ray Ozzie, right, in conversation with Steven Levy at the Wired Smart Salon event in San Francisco. Photo: Myleen Hollero, Orange Photography *
See Also:
- Google vs. Microsoft: What You Need to Know
- The Dogs of War: Apple vs. Google vs. Microsoft
- Google, Microsoft Push Feds to Fix Privacy Laws
- Microsoft's Ray Ozzie Sees Lower Margins From Cloud Computing
- Wired 14.10: The Information Factories
- Ray Ozzie Wants to Push Microsoft Back Into Startup Mode
- Google Docs Becomes Google 'Any File' as Cloud Wars Heat Up
