@Multizone

Steve Ballmer, CEO of Microsoft, took the stage to acknowledge the path Microsoft has chosen to embrace with partners. Ballmer discussed the key dimensions of the Cloud and finished by challenging partners to reinvent their business model.

Steve Ballmer’s presentation at Microsoft’s worldwide partner conference is always worth listening to intently. Nothing that is said or unsaid is by accident. He and his script writing team are accomplished at the creation of densely packed carefully selected information especially in this context, where the script is directed specifically to the 9500 partners and 3500 Microsoft employees all in the same room - not to mention the estimated 100,000 digital attendees online at www.digitalwpc.com.

WPC is where we - the partner community - expect to hear all about the product Innovation ready for taking to market in the coming year. Windows 7 sp1, Office 2010, Windows Server 2008 r2 - all have major releases or service pack to comprehend.

But this year finally Microsoft appear to be in some disarray. On the one hand they seem ready to push everything into the cloud. They have new platforms, products and programs which, they say, are based on partner feedback. They have massively re-organised themselves (according to The Register today) too in order to support this. Notable casualties appear to have left Microsoft from the heart of some teams judging by tweets of attendance at WPC as newpartners. Microsoft would have partners believe that it is the evolution of a strategy that they have been preparing carefully and are gradually unwrapping but It seems to Multizone that a battle for hearts and minds has been fought in Redmond and what we are seeing today presented is the first aftermath of that.

There was the usual unsubtle warning too - “be in the cloud with Microsoft or you’re not our kind of folk” said Ballmer. Remember that.

In the introduction Ballmer said he’s been shouting about the cloud for about 4 years - and in 2010 he finally felt it is clear that the opportunity and the transition to the cloud is now here. He said this last year though in New Orleans, and the year before in Houston, and the seeds were sown the year before that in Denver! He ‘super enthused’ that this was the largest attendance at WPC ever. He pointed to improvements in the economy, and also the number of partners moving with Microsoft and embracing the cloud with the potential to streamline and improve agility.

He implied that Microsoft has much more to do to develop a mutual opportunity in the cloud. Perhaps this was a reference to the reorganisation of the company.

The devil is in the details

Among the gloom of the financial market crisis last year there which clearly had some effect on Microsoft, were some positives, said Balmer, pointing for example at 10,000 paying customers of Azure - Microsoft’s cloud computing platform. No detailed breakdown of the segments these customers inhabit was given however. He also pointed to the fact that there were nine million beta users of Office 2010. There is sophistry in this message. It does not tell us how much Office 2010 has actually been paid for by real people - the beta was a free download so the nine million number is not particularly relevant. Ballmer also pointed to forty million users of Microsoft Online Services as a validation of success, but later Stephen Elop, who runs that division, intimated that this was across all the constituent products so you can effectively divide this number by four or five to get to real adoption levels since the products are bundled together in a suite. Every partner also gets 250 free seats, and it was not clear to me that these were excluded from the numbers. Multizone find these to be more marketing ‘dodges’ instead of useful numbers.

Azure, Online, Bing, Live and Project Dallas - all related and part of the same vision?

Ballmer next went on to talk about Windows Azure and Microsoft Online Services. His contention is that they create opportunities to reach new markets and customers, streamline operations, improve agility and focus on business value and in doing so they create responsibilities for Microsoft in reliability, security, privacy and innovation. This Multizone believe in. Microsofts investment in these areas is without precedent. They recognise that to win they have to be better, stronger, and more responsible than anyone else.

Unfortunately, as far as Multizone are concerned, several unrelated cloud technologies were blended into Ballmers elaboration of Cloud Computing. Ballmer used Azure, Microsoft Online and Bing, (the consumer search portal) to reinforce his points - “The Cloud learns, and then you learn, decide and take action” he said while pacing round the circular stage like a polar bear in a cramped cage.

‘Show me industry wide sales of personal computers by country’ - he said - is an example of a business intelligence search query in natural language. Confusingly he talked about bringing enterprise data together with industry data using a new product from Microsoft that only has a codename at the moment ‘Dallas’. It appears to introduce an apps store and a data store publishing business data so it can be used by third parties.

More to do

In an extraoridinarily candid admission of weakness Ballmer explained that Microsoft had ‘more to do’ to make cloud computing enhance social and professional interactions by delivering social networking in the enterprise. He pointed out that simple, secure, cross company collaboration is still a goal for Office and SharePoint Online product set. He noted that these goals were very difficult to achieve today with current products.

In a surprising acknowledgement that there is a world outside Microsoft’s own technology, Ballmer talked about the convenience and appeal found in Facebook and Twitter and said that with the 2010 editions of SharePoint and Office those metaphors of interaction can be made available under the control of IT. Ballmer did not note that these capabilities are not available in todays Online Services products and will nor be until post February 2011 except for the ‘dedicated’ versions for very large customers.

In passing he mentioned how pleased he was with Dynamics CRM Online although this is not yet available outside the USA so this was not relevant to the ‘foreign’ attendees from the 129 countries other than the USA represented at the event.

Driving server advances

‘The cloud drives server advances that drive the cloud’. This was the circular reference in the title of the next slide. Ballmer talked about the scale issues Microsoft is engaged with, such as running Windows Update, and Propagation of changes to Windows Live which supports millions of users. These kinds of problems, he said, have driven Microsoft to redesign the infrastructure for Windows Azure and SQL Azure - taking everything they have learned and applying it to those products.

Now, said Ballmer, the question turns to how to introduce these technologies back to the Server products. In a change of strategy the cloud infrastructure provided by Azure is to be made available to enterprise customers in special containers full of servers - so that enterprises can build applications that can exist in the cloud or in the enterprise.

This is not what was originally espoused by Ray Ozzie, Microsoft’s Chief Technology Officer and often cited filler of the technical vacuum left by the departure of Bill Gates. Ozzie, previously the inventor of Lotus Notes and the original Lotus Symphony integrated package had said loudly and often that it would not be possible to run Azure outside a Microsoft Data Centre, but now Ballmer says, enterprises who could not previously have participated in Azure technologies perhaps because compliance may have kept their data locked up centrally have an opportunity to harness the capabilities of the Azure platform in a private cloud, safe in the knowledge that Microsoft run the exact same software and hardware.

Perhaps this is the core of the rethink and reorganisation that has gone on inside Microsoft. Ozzies vision is preverted by the demand for Microsoft to protect the enterprise customer base. This of course is pure speculation.

Driving smarter device creation

The last part of the keynote centred on the devices being built to exploit cloud computing. The cloud demands smarter devices and applications for example written using HTML5 that exploit PC, phone, and TV uniquely through the integration of information, roaming capability and synch (I think it should be sync - which would be an unusual typo in a steveb keynote so I assume Microsoft disagree).

‘Windows 7 Slate’ ‘Windows Phone 7’

Coming within the year are ‘Windows 7 Slate’ and ‘Windows Phone 7’ devices. Confusing nomenclature I guess but the intent is to get rid of the ‘random device thats not supported by corporate IT’. The brand name of such devices was not mentioned but we assume Steve meant Apple and Google devices.

On Slates, he said “They will run Windows 7 - with ink as well as touch based input. They will be very good for knowledge workers working super well at work as well as dealing with their personal interests when they travel.”

On Windows Phone in another rare admission of failure Ballmer revealed the extent of Microsoft’s loss in this marketplace. “We missed a generation with windows mobile. Windows Phone 7 has received remarkable reviews. We will give you a set of devices that people will be proud to carry at home, and that enterprise IT will be pleased to be able to deliver.”

Ballmer concluded that Microsoft are ‘all in’ with the cloud that we should use WPC to consider if we agree that they are all in, see if they are driving forward, and decide for ourselves can we bet on Microsoft, and are the products going to continue to generate the kind of success that justifies that investment.

Multizone got the distinct impression that he was saying that if we did not agree with everything he was saying we should leave. Now.