Microsoft betting company's future on cloud computing

In his first speech at the University of Washington, Steve Ballmer said Thursday that Microsoft is betting the company on cloud computing.

In the strongest language yet, the Microsoft chief executive is embracing cloud computing and hoping to make the transition from a company primarily known for Windows and Office PC software to one known for its cloud.

"This is the bet, if you will, for the company," Ballmer said. "For the cloud, we're all in."

Ballmer spoke to several hundred students and professors at the Paul G. Allen Center for Computer Science and Engineering. UW President Mark Emmert called it "hanging room only" as he introduced Ballmer, with students watching from the upper-level balconies.

Cloud computing is being heralded as the next-generation shift that combines the Internet and computing. Rather than storing software and data on a computer or a corporate server, applications and content would run on remote servers and be accessed by Web-connected devices, including computers, phones and TVs.

While cloud-computing providers are targeting corporate users, many consumers already use cloud applications such as iTunes, Hotmail, Facebook and on-demand movies.

Microsoft began selling its cloud software and services, Windows Azure and SQL Azure, at the start of February.

Ballmer began his speech with a video in which a Microsoft interviewer asked UW students how they defined the cloud. After several fuzzy answers, the interviewer asked UW football coach Steve Sarkisian. He sketched a cloud-shaped football play on a white board, then said, "The cloud's a computing model where the physical model is extracted to enable people at work or play to have access to data across devices."

Ballmer went on to outline several dimensions of cloud computing:

• The cloud creates opportunities and responsibilities. Developers can potentially sell, host and market their software and service online to customers anywhere.

• It learns and helps you learn. Like a search engine that uses queries to further refine its results, other cloud applications could have the same ability to adapt. During Ballmer's presentation, Microsoft showed a mash-up of photos from Flickr and hyperlocal news information with a Bing map. A zoom on a North Seattle neighborhood, for instance, pulled up a morning blog report that a taco truck had caught fire.

• It enhances your social and personal interactions. Facebook and Twitter are examples of early social cloud applications that have caught fire. Microsoft demonstrated an Xbox Live service where the Xbox avatars of Ballmer, Emmert and Microsoft Chairman Bill Gates trash-talked each other while watching television in a virtual living room. While the service is not yet available, it showed Microsoft's ambitions to become a social-network television hub.

• It wants smarter devices. Microsoft has been trailing advances made by Apple's iPhone and Google's Android, but the company recently announced a redesign of Windows Mobile, renaming it Windows Phone 7 Series. The new phones are expected to start selling before the end of the year.

• It drives server advances and vice versa. Microsoft brought a "cloud in a box" to the UW campus — a shipping container filled with 10,000 servers. Cloud companies — including Google, Yahoo, Amazon.com and others — hope to persuade enterprises managing and running servers to outsource those operations to them.

• It fuels Microsoft and vice versa. Seventy percent of Microsoft's software developers are now designing cloud-based or cloud-inspired software, Ballmer said.

In his speech, Ballmer took a dig at Google. "It's great to know about 83 million Web sites on the planet, but if you're actually trying to find something specific," it's difficult to find, he said. For instance, Ballmer said he tried, and failed, to find a chart online that explains how the U.S. pays for health care.

In the question-and-answer session, an audience member said Microsoft has been late to the Internet and — now — to the cloud.

"When it comes to most of these cloud dimensions," Ballmer replied. "I feel like we're at the front or tending to the front. ... Definitely in the phone case ... and certainly in the search case, we've got work to do."

Carlos Marin, a senior computer-science student who said the talk was interesting, got Ballmer to sign his mug after the speech. Marin believes Microsoft is lagging in other areas of innovation.

"I think they're always a little bit behind," Marin said. "Now they're doing Windows phone, which is going to be just like the Apple iPhone. They kick their butt a little."

Another student, Erik Milneson, watched Ballmer speak from the third-floor balcony. He was excited about the shift to cloud computing. "It's individual computer power vs. cloud-computer power, and it's just so much more powerful and valuable," he said.

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com