It's early March at the CERAWeek energy conference in Houston, and Microsoft CEO Steve Ballmer is working the audience more like a football coach giving a halftime speech than the chief executive of the world's largest software company. Ballmer, known for his animated speaking style, is pushing the possibilities of cloud computing. He refers to "the cloud" as "the most important technology shift of our generation." Ballmer describes the technology as the power to connect intelligent devices such as personal computers, phones and even electric cars "with the accessibility and breadth of the Internet and the programmability and security we all expect today in our own data centers."
In his CERAWeek address, he demonstrates the potential of cloud computing by inviting Ron Forbes from the company's interactive entertainment business to show how Xbox 360 Kinect users can communicate with each other in a virtual world. Forbes begins by controlling an avatar in a beach volleyball match using natural body movements. Moments later, he switches to a simulated living room with other friends who are connected virtually through Xbox Live.
For gamers and techies, such technology may be old news. But in the business world, the concept of "cloud computing" is just beginning to take flight. For instance, in the next five to 10 years Ballmer says cloud computing could enable engineers to manipulate complex models of the physical world in a virtual environment using hand motions in a similar way that Xbox Kinect works. This could enable users to test ideas in remote locations in real time.
Ballmer cites several other possibilities, including the ability to connect multiple service providers, such as maintenance technicians, in various locations in a virtual environment so they can collaborate more effectively on troubleshooting issues.
Microsoft believes so strongly in the future of cloud computing that in 2010 the Redmond, Wash.-based company spent most of its $8.7 billion research and development budget on cloud-computing technologies. The company estimates that 70% of its 40,000 engineers work on cloud-related products and services, a figure that's expected to grow to nearly 90% by the end of this year.
Simulations in the Cloud
In his CERAWeek remarks, Ballmer said Microsoft software developers were in the process of bringing cloud-computing technology to Windows to enable the same type of interactivity on personal computers. The company has already embarked on projects with large manufacturers, including oil field services provider Baker Hughes Inc.
Conventional high-performance computer modeling required companies to purchase, set up and manage servers that could take a day to produce results, says Craig Hodges, Microsoft's general manager for manufacturing and resources. Cloud resources can produce results almost instantaneously, Hodges says. Now manufacturers can access servers in a remote data center that provides universal access for on-demand modeling.
Baker Hughes is using Microsoft's Windows Azure cloud services operating system to conduct complex simulations using hundreds of thousands of calculations. With Azure, Baker Hughes has cut simulation times from nine months to less than 30 days, according to Ballmer.
"Cloud computing is a major business initiative for Microsoft because we see the opportunity to open up computing to a whole new set of business users," Hodges says. "In times gone by, not every user had access to email at a company because they had to load up a PC, they had to put it on the manufacturing floor and multiple people were using it. It was a more cumbersome way of working."
The cloud enables technology providers to combine common tools such as email, word processing and PowerPoint into a subscription service that can be accessed from an Internet kiosk instead of having to carry a laptop or other personal computing device, Hodges says. While handheld devices have made their way on to plant floors for tracking and work-order management, they're not as suitable for day-end reporting tasks, Hodges says. "In the past a maintenance person had to enter data in a form at the end of the day, going to a computer outfitted with all the tools; it had to have business logic on the computer," Hodges says. "You can move all of that now to the cloud so it becomes much less costly for companies. It provides higher degrees of service and many more applications can be delivered."
Challenges Remain
Cloud computing represents a significant change in the way technology is used in the workplace, says Roger Kay, president of computer industry analyst firm Endpoint Technologies Associates. Some pieces of cloud computing are already in use throughout companies.
But many large corporations are hesitant to expose their information to third parties because of security concerns, so they're more likely using private cloud computing networks that they control and don't leave their four walls, Kay says. The extent to which companies use cloud computing in the coming years will depend on advances in communications technologies, Kay says.
"Cloud services have been around for a long time," Kay says. "The question is: How universal will they become? I think it's in proportion to how perfect communications become, how ubiquitous, how fast and how reliable communications technologies become so that they ensure that the cloud will work as well as your local computing."
Another challenge for Microsoft is competition. The company is trying to establish itself as a leader in cloud computing, but has an uphill climb against established providers, such as Google, Kay says. "The market is establishing itself as primarily coming from Google's direction," he says. "So that's what in some sense Ballmer is doing -- rising to the challenge that Google has laid down, and he's basically saying Microsoft is a player in this market."
In some cases, Microsoft is simply repackaging certain products as cloud offerings, Kay says. "Some of this is semantics," he says. "It's renaming stuff. If you're doing something that looks cloud-like, it's easy enough to take some of what you've got and put it under a new rubric and call it a cloud offering."
