In-depth Q&A: Microsoft's Bob Muglia details cloud strategy

And he explains what firms should do now to prep for a move to the cloud

Microsoft's Bob Muglia

Microsoft's Bob Muglia

Talking about Google in particular, what do you think people should have learned from the City of Los Angeles' experience with Google apps?

That it's not so easy. The City of Los Angeles is an indicator of how complicated an enterprise and a business environment is. It speaks to one of the most fundamental differentiators that Microsoft has in this space, which is that we are the only company in the industry that has 20 years of experience working with enterprise customers and really understanding their needs, and 15 years of experience building massive scale consumer services.

Go through the industry. You can't find anyone that has both of those. IBM has more than 20 years' enterprise experience. I'll give them that. But, really no consumer experience. Google has big consumer services, no industry experience in terms of the business.

I think what the City of Los Angeles found out was really some of the issues that come about when a provider doesn't have that experience of working with enterprise customers and understanding the complexity of that environment. One thing I think is really important -- if you look at the classic enterprise competitors, you know, the Oracles, the IBMs, the VMWares -- is that you gotta run this stuff yourself. And, you know what? Your engineering team has to run it.

IBM says they're running these clouds, but it's their services organization that's running these things and building these things. That's really an outsourcing. It's a hosting sort of circumstance and an arm's length thing. It's my own engineering teams that are running the clouds. It's my engineering teams that are getting called when there's a problem. It's my engineering teams that are dealing with and understanding what happens when you're running a service, day-in, day-out for a customer. I can't even imagine how a provider can deliver a cloud service unless they're operating that way. To be fair, Google operates that way, an Amazon would operate that way. The consumer service companies have that experience. They know that. But they don't know the enterprise. They don't understand the needs that the enterprise has in terms of the complexity of their environments, the lifecycle associated with their applications. You see things with these consumer services guys. They release something and customers build apps and they say, 'Oh, we're going to change that API in the next version completely.'

And customers have built and made investments. We've come to learn what sort of expectations an enterprise customer has. It's that balance of understanding what it means to run these services at scale and actually have your engineering teams live with it, and understand the complexity and the expectations in the enterprise.

What other big shifts is Microsoft focused on with major corporate customers around collaboration, mobility, business intelligence?

There are some great things that are happening. We see a strong emergence of a wide variety of devices and connecting those sets of devices. Obviously, we're highly engaged in building those things. We're excited to see Windows Phone 7 launching this fall. That's really a huge step and I think we'll start to see a lot of success there.

You mentioned business intelligence . I think that's an example of one of the major opportunities that emerges in this sort of this crunch time where we have this combination of business systems and sensors that are being deployed. I was just in China not that long ago and the utility companies are going to have smart meters sending this massive amount of data back associated with the usage of electricity. There's a massive amount of information that's coming into these systems. How can we actually make use of that and put it in a form that people can digest and actually make better business decisions?

Our view is that [BI] is something that needs to be democratized and made available to everyone, every person who is working with information. Other folks are building these complicated, high-priced tools where there's a lot of training required. Our tool for business intelligence is called Excel. It's a tool that people really know. We took a massive step forward this spring with Excel 2010 and the power pivot capabilities that we put in there for people to analyze and work with business data. So now Excel can work with, essentially, information of any size, data sheets of any size, hundreds of millions of rows, with some very, very strong visualization technologies. People can view the data and pivot it in different ways. The path of innovation on that stuff is unbelievably exciting.

One of the things that excites me in general about this time is I that feel like the speed of innovation and our ability to bring technology to market is really increasing. I very much see that in the BI space. We have a SQL conference coming up at the end of this year and there's a whole new round of interesting stuff that we'll be talking about.

Do you have any interest in NoSQL, the "big data" solutions?

Absolutely. Let's make sure it's all clear. NoSQL has really become SQL and other ways of working with data. The only provocative thing about NoSQL is the name, right? People have been working with non-relational data sets since the beginning of time. Columnar databases, flat files. SQL relational databases are not the way to analyze Web logs. Nobody analyzes Web logs with a relational database. They may sometimes take information out and put it in a data warehouse, but it's an example of a data set that's not naturally suited to the relational model. There's a new capability in SQL Server that we deliver called StreamInsight that's designed to do real time analysis of business information that's not relational.

And, for example, our Bing team is using that now to do ad serving based on what a user is actively doing. If you don't have any profile information about a user, you can, based on seeing what sites they're going to, use that information in real time to do better ad serving. That's an example of a NoSQL scenario. It came out of our research and it's used broadly in our Web services. There's a technology called Dryad that essentially does a sophisticated MapReduce on associated Web logs or, again, non-relational data. We're incorporating that into our high-performance computing products, making that available broadly to everyone. This is new in the sense that it enables you to work with this massive amount of data. The idea that you had relational and non-relational data is not new.

Going back to cloud, how do you see this shaking out with your ecosystem of all the companies that build around Microsoft?

Do you see in the future that they'd even be able to build into the core applications, the Exchanges, the SharePoints, the Office products? The cloud very much will take existing applications forward. But the really exciting thing is the new applications that can be created and the way these things can be brought together or mashed up, to use that term. As we move services like Exchange to the cloud, the ability for people to build applications around that increases, because you'll have standard protocols that are available for people to work with and pull information in and out of those things. The impediment of having to build up the infrastructure associated with deploying these business applications is just gone.

If a customer is using our online services, our Exchange-hosted services, and an application wants to work with contact management information, as an example, for an application that's a logical extension of Exchange, they'll be able to deploy that in a cloud service like Windows Azure and interoperate and work with the data with Exchange, and then simply sell that service to the customer without having to go through the process of talking about the infrastructure.... I mean, very literally, a customer that's operating with, say, Exchange-hosted services could very rapidly trial one of these applications, and begin to get it up and running, with virtually no cost to them. The issue of selling that and actually going through the deployment, all of those things go away.

COO Kevin Turner said in July that leading with cloud helps better position Microsoft to sell on-premise products. What did he mean by that?

Well, I think what he means is that by explaining the future and helping our customers to know where they're going in the future, they have confidence in what they're doing today. There's a path. No customer is going to cut over immediately to the cloud. That's impossible for any substantive customer to do. They may move their messaging system to the cloud, or they may move a given application to the cloud, but any large customer has hundreds, thousands of applications. The complexity of their environment is very high. But by helping our customers see where they can drive themselves into the future, where they can focus on their business advantage and not need to worry about these infrastructure components, it provides them with a level of security knowing what they're doing today can be brought forward. It's a good balance.

But what about the knock on Microsoft in the sense that you're not pure-play cloud? Some competitors can say: 'Hey, we're all cloud. We're fully committed.' This reflects the benefit that I was talking about a few minutes ago where Microsoft has 20 years of experience of working with our enterprise customers and providing them with the services and capabilities they need, and 15 years of experience writing consumer services. If we just had that consumer services experience, I mean if all we had was a hammer, everything would look like a nail to us, too.

But that's not the world our customers live in. Our customers live in a world that's very heterogeneous. There is no significant customer where everything they do is in the cloud today. The fact that we're able to meet the customers' needs with on-premises software, while providing them with these amazing new services that the cloud brings and allowing customers to move at their own speed is actually a huge advantage. It turns out all of our customers see that. Our engagements with customers about where they're going in the future, what they want to do as they roll out a new messaging collaboration service, they're very positive. And, in fact, we're winning the vast, vast majority of all those engagements.

Customers don't think your approach is defensive toward the cloud? No, it's not defensive at all. In fact, we've been so focused on investing in the cloud and driving new sets of value there, that customers see Microsoft taking very much a leadership role in terms of providing a set of services that really no one else can match. I think that's very true today. If you look at what we have with our Exchange Online services, our SharePoint Online services, if you look at what we're doing with Windows Azure and a new service we'll be bringing out next year, Windows Intune, nobody on the planet has services like that for business customers. They're highly differentiated.

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Tags cloud computingMicrosoftinternetGooglesoftwareapplicationsData Centerhardware systemsConfiguration / maintenanceEnterprise Web 2.0/CollaborationBI and AnalyticsEnterprise Architecture and SOA

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