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Microsoft's Ballmer joins clash over Cloud credentials

14th Oct 2010
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The Microsoft CEO has waded into the debate about the definition of the Cloud on his European tour.

Steve Ballmer had his head in the Clouds last week. Conducting a European tour that takes in the UK, France and Sweden, the Microsoft CEO once again took the opportunity to hammer home how important Cloud Computing is to his company, making it the main topic on his agenda in a series of presentations.

Stopping off at the London School of Economics, Ballmer acknowledged the ongoing debate about the definition of the Cloud, a topic that has once again come to the fore since Larry Ellison questioned's Cloud credentials.
"The Cloud to me reflects the transformation that’s going on in the computing world," he argued. "From things which are islands; from things which are either in a corporate data set or in the internet to things that are in both; from things that are either in a PC or a phone to things that are in both; from things that may be isolated, like the TV, to things that can span literally your entire digital life. The Cloud is just an industry codeword for talking about using the internet and smart devices in new and different ways."
Of course there remains the underlying imperative of cash. "To some degree when people talk about the Cloud they will talk about all the money it could save to enterprise people spending money on IT," admitted Ballmer. "If you ask most CEOs around the world today what the largest expense item in their budgets, that they don’t feel they have a visceral understanding of, it is usually information technology in fact."
Ballmer reiterated a point he's made on previous occasions that the Cloud will open up opportunities to make better use of technologies – and burdens. "The Cloud will certainly also bring with it a new set of responsibilities in terms of security, privacy and data availability, because as soon as you start pooling computing and data in new and interesting ways, really defining and really being careful about weighing up who owns what data and how it is controlled and used is a fundamental responsibility of every participant in that chain," argued Ballmer. "There will be a lot of discussion just about privacy as one example of that; privacy is a particularly good one but there will be more and more."
Cloud expansion
Ballmer added that Microsoft is seeing corporate take-up of Cloud Computing now as well as ongoing adoption at consumer level. "Consumers are embracing the Cloud almost implicitly: 'Sure, I’m on social network; yes, I love my new smartphone. Yes, I’m willing to roll my documents or my notes and share them through the Cloud'. It’s almost second nature as long as we provide the capabilities to the consumer," he said. 
"But companies are also now increasingly willing to commit themselves and to bet their futures and their use of technology on the Cloud. If you take a look at the total spending on information technology, consumers today buy about – I’m going to use a proxy – they buy about two-thirds of the devices, but they only spend about one-third of the money. And so in a sense it’s important to see both the world of the consumer and the world of business embrace this phenomenon."
Cloud will also impact on government, he added. "In terms of egovernment and Cloud and spend and the like, if you take a look at most IT budgets, probably 70%, close to it anyway, gets spent on labour. So if you really want to help anybody save money on IT, you have to say ‘how do I help people save money on labour?" he said. "If you take a look at modern data centres, they have a lot fewer people in them than today’s data centres do. So I think the fundamental advance that will help – whether it’s the UK government or other institutions – save money is the automation of tasks today that require a lot of labour."
With the UK Coalition Government currently looking to ICT providers to sign up to a new deal (at lower cost), Ballmer conceded that reducing prices was an option on the table as well.  "Sure, we always have a chance to cut our price," he said, but added: "We tend to be the lower cost participant on most bids; we are not the most expensive guy. So we have been a force for price reduction.
"But that sort of misses the big picture. The big picture is: software helps automate things that people do and software helps reduce the amount of hardware it requires, because both of those things are bigger in the food chain of cost. And moving to Cloud service is a way to kind of bundle a couple of those themes up."

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