Microsoft has never been the front-runner in any on-line related strategy. Its late arrival to the Internet is well documented and goes down as one of the few major mistakes Bill Gates made in guiding the company. This is different, though. With this shot across the bow, Ballmer has raised the stakes to everyone from players like Salesforce.com to Google and let the world know that Microsoft strongly believes the future of computing is in the cloud.
I guess the question is whether or not they can pull it off. A couple of months back I wrote about Microsoft's Azure platform. With this week's announcement, the Microsoft vision is becoming even clearer. With the release of Azure, Microsoft is attempting to herd their partners and developers down the same path they are taking. By steering their own company, and essentially force-feeding developers and partners the way they need to work, Microsoft is building a cloud army to take the battle to their competitors.
Whatever you think of Microsoft, they have a very good network of partners on both the infrastructure and application development side. Microsoft's greatest strength has always been enabling its partners to get customers onto the Microsoft platform. The suite of tools at a partner's disposal to build a cloud-based computing solution is truly unparalleled in the industry. Then, once your application is on the Azure cloud, it's only logical it will interact with Office on-line much easier than it will with Google Apps. Once that happens, Microsoft has you again. This time in the cloud and this time probably for good.
There is no denying the Microsoft is facing stronger competition than it has in a long time, and frankly Google and others are forcing it to alter its business strategy. The ironic part is that the Cloud approach probably makes them more nimble as a company than they have ever been in the past. In the long run, that might prove to be a very bad thing for competitors.