Microsoft: few companies to provide cloud computing services

Microsoft Senior Vice President Brad Smith believes that the number of providers of internet-based software and services will initially be limited to just a few major enterprises. It is impossible to say what impact cloud computing will have on the IT industry in the future, said Smith in an interview with the German newspaper Die Welt. "The high level of initial investment will restrict the numbers to those few companies capable of offering a complete package backed by a global network of distributed data centres."

Microsoft announced its intention of entering this relatively new but lucrative market last month. There are already a large number of suppliers offering customers software, services and the use of an IT infrastructure via the internet. They claim that corporate customers can avoid the high costs of investing in their own IT infrastructure by accessing the IT services they need via the internet ("the cloud", so-called because that is how it is traditionally depicted on network diagrams).

IBM, Google and Amazon are some of the companies with the capability to supply these services, according to Smith. "Amazon even has a slight competitive advantage." These companies and others such as the cloud-computing specialist Salesforce.com have been offering software and services over the internet for some time, with growing success. Market researchers from IDC estimate that the market for cloud computing will be worth $42B by 2012.

Microsoft plans to deliver its own service. At the end of October, the software giant announced its "Windows Azure" platform, which enables customers to access and use the Microsoft operating system together with data storage and other services. Microsoft intends to build another three major datacentres for the Azure platform this year. The company claims that, by using its platform, businesses will gain greater flexibility in the use of their own IT resources. "A start-up can simply make do without its own server and shift everything onto the cloud," said Smith.

There are still legal issues to be clarified, such as who is legally responsible for data transferred across national boundaries, said Smith. Also, there is the question of whether data services should be regulated in a similar way to telecommunication services. "Governments have to discuss these things and work together to provide law enforcement at an international level," said Smith. For the moment, the existing legal framework will suffice. "After all, the internet didn't wait for the lawmakers to give the green light."

(lghp)