It's probably too much to suggest that Microsoft CEO Steve Ballmer is just an old hippy at heart, but he's certainly very fond of the late 1960s. “1969 was really an important year,” he says. “Woodstock, man on the moon, and those were small, because the Internet was really first used in 1969. The gift that just keeps on giving.”

 

From the man in the moon it's just one small step for Ballmer onto the topic of Cloud Computing, a subject that was once met with reticence by Microsoft but is now top of any conversational agenda. “The Cloud sort of is part of that Internet gift. It's the next step, it's the next phase, it's the next transition, “ enthuses Ballmer.”Depending on who you are, and how you think, you could say the Cloud started five years ago, ten years ago. You can go back to 1969, if you want, and say that the Cloud started 40 years ago, because the microprocessor and the Internet are the gifts that just keep on giving us the chance, and the opportunities to make a difference.”

 

This uncertainty of attribution leads in turn to an uncertainty of definition which in turn can be seen – cynically – as an opportunity for a vendor to draw a line in the sand, a line conveniently close to its view of the world of course. “Ray Ozzie, who is our chief software architect, wrote a memo almost five years ago now talking about [the Cloud] and its importance,” says Ballmer. “We were sort of stimulated and driving the company - the Cloud, the Cloud, the Cloud, the Cloud. And yet here we are five years later, and there's still so much unrealized potential. Big problem, what the heck is the Cloud?"

 

In fact this needn't be too much of a concern, according to Ballmer, as the term might not be around that long anyway. “The real thing to do today is to capture what are the dimensions of the thing that literally I will tell you we're betting our company on, and that pretty much everybody in the technology industry is betting their companies on - this incredible transformation around the Cloud,” he argues, adding that he sees five key characteristics as being important.”

 

 

The first characteristic is opportunity. “There are literally new software investments that create new business models, new opportunities to start and form businesses, because of commercial software infrastructure that's never existed before,” he says. “It also creates opportunity and responsibility to the user to protect the user, to protect their privacy, protect their confidentiality. The ability for literally any small creator to create a piece of content, create a piece of software, to have it available instantaneously anywhere around the globe is fantastic.

 

“Second dimension of the Cloud: The Cloud learns and helps you learn, decide and take action,” he continues. “The world is a large, complicated place. So, the first thing that got built to help people navigate were essentially directory services, search services. People built tools to help you navigate and find information, pull it all together, et cetera. And yet, we've got to further than that. The Cloud needs to learn about you and it needs to keep learning and figuring things out about the world that has been described virtually. The Cloud itself needs to learn. It's got to collect new data. It's got to sense new data. It's got to represent the real world, and keep getting smarter and better, so that it can help me learn.”

 

Next is social interaction. “The Cloud enhances your social and professional interactions,” notes Ballmer. “This is one I think if you stop and think about it you say, of course, that's e-mail, that's social networking, that's this, that's that, that's the other thing. And the truth is, that's all correct. And yet the degree of innovation that will continue to go on in the area of people helping them connect with one another and connect in various personas. There's what I want to do socially, and what I want to do professionally.

 

“We all are people we go to school, we go to work, we have personal lives. We socialize when maybe people don't anticipate that we will, like when we're at work, and we also do things professionally that are surprising,” he suggests. “The Cloud winds up being the place of innovation that lets us pull our lives together the way we want to, to touch people the way we want to. To find people when and how, and the way we want to.”

 

 

While social interaction is thought of in terms of consumer-focused offerings such as Facebook, Ballmer argues that there is a compelling B2B case as well. “The way businesses collaborate has changed and will continue to change,” he says. “One of our very good Cloud customers is a company called Aviva. They're about the fifth largest insurance company in the world. The name Aviva is a new name. There was one 24-hour period when they switched it on, because this was a merger. On the first day they decided 'we really better get out and tell our employees that we've got a new name'. It's going to be a tough day if somebody goes home at the end of the day and their spouse, or significant other has no clue where they work.”

 

This was achieved by having the Aviva CEO communicate via the Cloud with staff. “Not everybody is at work. You can't count on everybody being in the four walls, people with customers, their various places, how do you do that, how do you pull that together? It's the kind of things where more innovation is necessary,” suggests Ballmer. “Taking Microsoft Office to the Cloud, letting it run in the Cloud, letting it run from the Cloud, helping it let people connect and communicate, and express themselves that's one of the core kind of technical ambitions behind the next release of our Office product in June.”

 

The fourth dimension of Cloud Computing is the need for smarter devices, argues Ballmer. “The Cloud wants smarter devices. When it comes the Cloud, the devices that you use to access it do matter, whether it's the PC, the phone, the TV, the devices that you use do matter. PCs don't look like PCs did five years ago, and the Cloud has a lot to do with it. Phones don't look like phones looked at all five years ago, and they're not going to look the same in five years. But they're smart. They're going to get smarter. That doesn't mean that they can't be simple. It doesn't mean that they can't be cheap. That's the job of us innovators, how to give people the smarts that they want to take advantage of the Cloud, and at the same time the simplicity and low cost.”

 

Finally, says Ballmer, the Cloud is about server technology advances. “The Cloud originally was just a bunch of servers,” he attests. “It was PC servers, and more and more servers, and more and more and more servers, and more and more and more and more servers, until today there's something like 2 million servers sold around the planet just to power the Cloud. And yet, how we think about everything to do with server hardware and server software now needs to change based on the Cloud. The Cloud has really driven a perspective that comes from scale.

 

“The catch point here is not only that the Cloud drives server advances, but those, in turn, are now starting to drive the Cloud itself. We're asking the question, how does the Cloud become something not just that Microsoft and four other companies run on behalf of the whole planet, but how do we give the Cloud back to you, to users, to institutions? Businesses and governments,are now clamouring to buy the Cloud and put it in their own facilities, or have it run in their own countries, or have it run in their own states, and own municipalities. The Cloud has changed the server.Now through the private cloud, or the customer cloud, the cloud itself is being morphed by these innovations.”

 

For Microsoft itself, the Cloud is now, according to Ballmer, dominating strategic thinking. Just as once Bill Gates redirected Microsoft's thinking overnight towards the Internet and browsers, so now Ballmer is focusing it on the Cloud. “The Cloud fuels Microsoft, and Microsoft fuels the Cloud,' he insists. “We employ across the globe about 40,000 people who are involved in building software, 40,000 people. About 70% are either doing something that is designed exclusively for the Cloud, or is inspired to serve the five dimensions [of Cloud]. By a year from now that will be 90%. We still have existing customers, and we'll serve them well. But, the inspiration, the vision, what we're doing, how we're thinking about delivering, it really builds from this Cloud base.”