The beginning of the week saw Microsoft announcing a comprehensive cloud-computing strategy at its Microsoft Professional Developers Conference (PDF) in Los Angeles. At its heart would be Windows Azure, which Microsoft hopes will inspire developers to develop Windows software that will run in the clouds, much like Amazon's Elastic Compute Cloud.
Everything else is pretty much in the air though, which is understandable as the database and file storage components are relatively untested. I wouldn't worry too much if I were you; leave it to Microsoft to work out the technical kinks and figure out a "competitive" pricing to its advantage.
The really important question to us here is: How will Windows Azure affect SMBs?
First of all, we have to remember that Microsoft is the world's largest software vendor, and it didn't get there without getting a few things right along the way. Indeed, the amount of resources that Microsoft is devoting to this endeavor is staggering - a new version of SQL Server called SQL Services for storage, as well as its own document and data synchronization architecture, among others. The bottom line here is really not complicated: Even Microsoft is heading off into the clouds. You can argue that the paradigm shift to the cloud happened years ago, but it is another thing entirely to have Microsoft validating it.
So what should the SMB do at this point? I say take a wait-and-see posture. Why? It's too early to make decisions about what your company might adopt -- even if your company tends to be an early adopter and you've been waiting for this Microsoft announcement for ages. For one, we don't have specifics about things like whether the Win32 API will be used, or if a new - or complementary - API will be made available. More importantly, even Microsoft is uncertain about the pricing structure. With so many unknowns, it is impossible to even know whether developers will come on board in the first place, much less the kind of cloud-hosted applications that will emerge.
At the end of the day, I think this development is a reminder that cloud computing is here to stay. I wrote about switching over to a hosted service for e-mail just last week, which is surely as good a starting point as any. On the other hand, if you are planning to buy loads of servers for in-house applications, it might make sense to delay the capital outlay by implementing virtualization first.