We All Had Our Heads in the Clouds in 2013

And there they shall stay

2013 was an interesting year for many reasons, and in Microsoft-land we had more than our fair share of controversy, between the corporate reorganization, Steve Ballmer's unexpected retirement announcement, the Windows 8.1 mulligan, and the crazy ineptitude of the Xbox One launch. But the biggest theme of 2013, I think, was the cloud. And that's as true for Microsoft as it is for the rest of the tech industry.

I wrote a lot about Microsoft and the cloud in 2013. The central piece, perhaps, was my contention that Azure was the future of Microsoft, which could end up being more prescient than it first appears if Microsoft Executive Vice President of Cloud and Enterprise Satya Nadella becomes Microsoft's next CEO, as many expect. But Microsoft's move to the cloud was handled in the most delicate and, I think, customer-friendly of ways, with the company offering customers—get this—a choice. Customers can continue to use on-premises solutions such as Windows and Office, they can move to cloud-based solutions (e.g., Windows Azure, Office 365), or they can do both.

This latter capability, the so-called hybrid approach, is what truly separates Microsoft from its competitors. It's also what separates Microsoft from companies that simply plow into cloud services without considering that some customers still need or want on-premises solutions too. And it means that companies can move to the cloud on their schedule, not based on the needs of their technology providers.

"We think subscription software-as-a-service is the future," Microsoft's Cliff Patterson wrote in a post to the Office News blog back in late May. "The benefits to consumers are huge. Subscribers are always up-to-date. They get the latest and most complete applications. They can use subscriptions across the multitude of devices people use today. Web services like SkyDrive and applications like Skype are also more easily integrated with subscription services, like the new Office 365 Home Premium."

But there many other Microsoft cloud discussions in 2013. The year kicked off with Microsoft having quietly released Windows Intune 4, the cloud-based device management solution that's now being morphed into a System Center offering. And then it launched the second generation of Office 365 products, which came in versions for both consumers and businesses of all sizes, most of which include multiple-install licenses for Office 2013 Professional Plus.

In May, I wrote about rumors that Microsoft is preparing to add hosted VDI to Windows Azure, a product category many call Desktop as a Service (DaaS). But Amazon released its own Daas service, called Amazon Workspaces, first. There are of course other entries in this market, and Cisco and VMware announced a Desktone solution just this past week. We're still waiting on Microsoft in this space.

I'm particularly fascinated that the rapid release cycle that is a key advantage of cloud services is being applied, where possible, to Microsoft's on-premises software too. For example, Windows has moved to an annual release cycle, while its built-in apps and capabilities are updated more regularly. And Microsoft issues firmware and software updates for its Surface tablets every single month, a tantalizing glimpse at what technology can be like when the software giant isn't shackled by its PC-maker partners.

In July, I argued that this change will help hasten the move away from monolithic software releases and toward subscription-based services. And that all we have to do is look at Office 365, updated monthly, to see the benefits of doing so.

Microsoft's massive reorganization, also announced in July, reflects how this new thinking is pervasive throughout the company, and although Microsoft now describes itself as a "devices and services" company, it's fair to say that Microsoft is really just a services company, or should be. But one that also happens to make a small number of devices. Still, I'm fascinated that for all the comparisons we like to make between Microsoft and Google or Apple, the firm it's most closely emulating right is Amazon, which charted its own devices and services vision almost a decade ago.

Of course, 2013 was also the year of Edward Snowden and the NSA. But we don't need the world's most infamous whistleblower to tell us that putting all of our data in cloud-connected services is a potential security and privacy risk. In "Cloud Computing Is All About Trust," I argued that Microsoft was a trusted partner that could guide businesses into the cloud and is far more trustworthy than companies such as Google.

And that, I think, is where the cloud discussion still sits as 2013 cruises to completion. Microsoft and other tech companies have pledged to encrypt all of the data in and passing through their data centers. And they've asked the United States and other governments to curb their spying activities, since customers and potential customers are starting to question whether their data is safe from prying eyes.

We'll see what happens in 2014. My guess is that the great migration to the cloud continues unabated. But I'm interested to watch it unfold either way. 

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