Ray Ozzie steers Microsoft into the cloud

Microsoft Chief Software Architect Ray Ozzie has officially filled the shoes previously worn by founder and Chairman Bill Gates, stepping in as leader of the company's vast developer network, which is its lifeblood and crucial to the enormous success of Windows. Ozzie delivered Monday's keynote speech at the company's Professional Developers Conference (PDC) in Los Angeles, introducing Windows Azure, a cloud-computing development and hosting environment that integrates Ozzie's vision for the future of the Web, which he began building at his company Groove Networks before he joined Microsoft.

Ozzie also took some time Monday for an interview with IDG News Service, discussing Azure, cloud computing and the future of the Windows OS. An edited transcript of the interview follows.

Windows Azure will help corporate developers bring application development to the Web, but at the same time it looks like it's going to help Microsoft bring its own applications to the Web. Can you talk about the two purposes that it serves?

We looked at our own internal properties, we looked at the trends. We always try to monitor what are the technology trends that are going on and where might things happen. Our systems people were getting more and more interested in how the high-scale Internet services really work. And so we did this big assessment and we really came to the conclusion that there's a role for this new kind of computer, this computer in the sky, computer in the cloud.

When was this?

The first document that I know of that I wrote about was in December '05, and I know we were talking about it throughout '06. It wasn't so much what Amazon was doing, because essentially Amazon's model -- even though I have a lot of respect for what they've done -- they've basically taken more or less a hosting model of taking existing operating systems and putting them up into the cloud.

The conclusion we came to was there was this new role for this new third tier of computer in the cloud. You've got your personal computing tier, you've got Windows servers for the enterprise tier serving the enterprise, and now this computer in the cloud serving this whole worldwide Web.

Once we took that on we basically had to start thinking how does it change for developers, how would it benefit enterprises over the long term and so forth. So that project has been going for several years now, and part of the way through that project, that was when we began evaluating how can we take our business applications online on that platform, how will it help our consumer apps -- Hotmail and things like that.

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But once we decided to really make it like a Windows in the cloud, that's a decision where you say, well if we're going to build those APIs [application programming interfaces] for our groups internally, let's make sure we also give them to people externally because they'll find just as much benefit as we did. They don't have those people who run hundreds of millions of user services as we have. So I can't say there was ever a time that it was only for internal use or only for external use -- they really kind of grew up together. There should be no question it will help us run our internal things more efficiently, but we're really measuring our success more from the external feedback because it's more balanced than the feedback we get internally.

So you said Azure is different than just taking things and putting them on the cloud. Can you tell me how?

Let me try to describe it -- this is not an analogy I've tried. Let's say that Richard [Eckel, Ozzie's colleague] over there tossed me a tennis ball, and then he tossed me a second one, and he tossed me a third one. I could possibly juggle those three. Each ball that I'm taking, I'm doing what we in the industry call scaling up. I'm the computer and I'm doing these things as much as I can. Now, let's say he throws 100 balls at me. There are limits to the scale-up model and if I fail, all the balls will fall to the ground. But if we together as a group decide we're going to take turns, as he starts throwing them -- hey you grab that one, I'll grab that one, he'll grab that one -- there's a chance that by just adding more people, we can take any number of balls that he'll throw at us. And if one falls down, then maybe the guy next to him will pick it up, but he'll keep going. That's called scale out. It's basically saying the more tasks you're juggling, the more you can just keep adding things, and it just works in that way. The systems we've built for enterprises are really the scale-up model. We build a system and we try to add hardware to make it get bigger and bigger and support bigger and bigger enterprises but eventually that kind of falls apart. Something like Notes or Exchange has a history in building up and up and up. Hotmail started at exactly the opposite way, knowing it had to scale to hundreds of millions. There's a process you use to take an enterprise app and change it and rethink it to be that broad, horizontal thing. We've done that with Exchange, and we're doing that with more and more.

So that's the model Azure is going to take. It seems like it's more like worrying about how you're going to architect the hardware to meet the application, but the application sort of meets the challenges [of different tasks].

That's exactly right. It would be writing a program to be able to catch one ball and keep bouncing that one ball and cranking up a lot of them to handle all of them coming at you instead of designing the app to try to juggle.

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I've talked to some users about Azure and they've said one of the benefits of a hosting applications platform like that is the applications would no longer be dependent on the desktop OS, and you wouldn't have to worry about compatibility and things like that. But then, Windows client is still a massive part of Microsoft's business. Obviously you're on to something, but how is Microsoft going to evolve Windows -- starting with Windows 7 -- to take advantage of what you're presenting with Azure?

Let me separate a couple of things. The thing that you saw today is this computer in the sky. The Windows Azure part doesn't have a direct correlation between with things that go on with computers and devices.

I believe that people buy devices because they work for them. You buy a computer because you like the form, you like the function, you like the apps that operate on it. In the future there will be some service interconnection that you like the way it relates to the cloud. But really people buy PCs because they like the cost and the function of what it does. Windows 7, Windows 8, Windows 9, whatever the future Windows are -- they will be successful businesses based on how well they do the job with the hardware innovations that are coming down the line in that realm. It really isn't a decision that will be connected to that service. Same with phones -- you pick a phone because it matches your outfit or your purse or the way that you want other people to see you. Sure, there's a relationship to the cloud and to other things, but that's why we believe very strongly in Windows and in this services thing.

How do you keep your feet in both worlds as you're facing competition on both sides? You have to worry about Google on the Web services side and you still have to worry about open source, and now Google is trying to get in on the desktop applications. It's a delicate, tricky thing.

Oh, there's more [competitors] -- there's many more. On the business apps side you've got SAP and Salesforce.com. As someone who has had a long-term relationship with Microsoft and came in three-and-a-half years ago, one of the things that I've respected about Microsoft is it's a very resilient culture. Every time Microsoft has had a very big competitive battle, the culture learns from that battle, and then when some new battle comes along, it doesn't paralyze the company. People go, 'Oh, here we go again. I guess we have to turn the ship and address that challenge.'

There have been some immense things. Open source I think was probably the thing that shocked the system the most because what if people don't value software anymore? Of course, that didn't turn out to be the case. Open source turned out to probably have created more opportunity because enterprises had to integrate our systems with their systems, that creates more demand for our systems. It's just a good situation.

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Is Google perceived as a threat? I'm sure there are people within the company who view it that way. But as long as they stay focused on the customer, what they're delivering for that customer, as long as every time there is a chance to do new product planning that we factor in what we can learn from what the competitor is doing and just keep iterating, I have confidence we'll stay in a good place.

In Windows 7, you're going to take out some applications that formerly were part of the operating system and send people to Windows Live instead. How are you going to see the operating system evolve as you move to more hosted services, because it looks like at some point it may become more of a control environment for aggregating and managing all of these different services? Would you say that's true or false? How would you see it evolving?

It's an interesting perspective. I would say that you said several things and I'll try to bring them together. The reason those apps were pulled out is that in many cases apps now want to have a services component and a software component to them, and just delivering it as a service and having the service update the software as the service evolves just seems to be better in terms of the way those particular apps have been packaged -- Movie Maker, Photo Gallery. So you'll see more and more of that.

The core OS -- there is such device innovation going on right now in terms of the broad variety of PCs. I don't know what kind of PC you have at home, but I kind of go nuts, because I can, and I have a 30-inch monitor with two 21-inch wing monitors. I have all of this screen real estate. It's not even a very expensive PC but the stuff that I can do with it -- I can edit a document here and review the thing here and have the Web open. It's context that surrounds me. At the same time I have a laptop I travel with. It's got a bigger screen because my eyes aren't that great, but it's portable enough. I have a really, really thin one for when I go on vacation -- I can carry that with me. There is such a broad variety.

All I'm getting at is the core purpose of the OS on the device, whether it's a phone device or anything, it's really to make the hardware and the user kind of just come together like that. The purposes of the apps is to have the seamlessness between the PC, the service and the phone. The purpose of the OS on the device is to have the best value on that device. So, I think there's just going to continue to be tremendous opportunity for innovation on these devices.

I'm still trying to understand the balance between the OS as something that takes advantage of the hardware it's running on and the OS as something that also takes advantage of the Web.

The way that we're going to do that -- to try to be as clear as possible -- the OS that you get out of the box will clearly have some base connections to the Web. Like the browser. Like Windows Update. I'm just saying these are base-level connections to the Web. We have to kind of limit the amount that we go above there because we still sell Windows to a large number of people who don't have great Internet connections. It might be the government that has their own separate network, it might be in a part of the world that doesn't have great [Internet connectivity]. But it's still great Windows. Then the pieces that connect Windows more richly to the Internet will just use the Internet to deliver those pieces themselves. We'll make sure that Windows has enough open APIs so you can bring that thing down and have it hook right into the shell, and have it feel like a natural extension.