Does the migration to cloud-based computing spell doom for Microsoft?
This post is a loose translation of my post on the technology business blog at Danish national newspaper Berlingske.
Q: How fast will the transition to cloud-based computing take place, and what will it mean to Microsoft and their cloud-based products like Azure and 365?
A: This transition will be going on over the next 25 years - meaning that some apps will probably never be migrated. As an example, some of the back-office banking systems in use today were probably written in the 1970s for a mainframe computer - which is where they are also still executed today.
The apps with the most value, and with the highest re-development costs, tend to remain where they are... but very little new stuff will be developed for these stagnating platforms (mainframes, minicomputers, file servers, client/server). So the market may be seen as a huge lump of jelly, moving at varyings speeds depending on the segment in question.
The established players on the established platforms have a great interest in delaying the transition as much as possible - IBM on mainframes would be as good an example from the late 1980s as Microsoft is now on client-based computing.
The market value of Microsoft franchise relies almost exclusively on client-based software. Indeed, it would be easy to argue that the entire life cycle of Microsoft is closely correlated with that of the personal computer. Which was once called a micro-computer... the parallel to micro-software is almost too obvious.
It came as no surprise when Microsoft a couple of years ago started talking about "Software and Services" - even when they were speaking at conferences like SaaS University 2008 (http://www.softletter.com/SaaSUniversity/SaaSUniversity.aspx) where the rest of us were doing presentations on Software-as-a-Service (aka "cloud computing").
People that underestimate Microsoft's ability to change and reload have often paid dearly for their beliefs (including this author). And in the current situation it seems that Azure and 365 are true cloud products, or services, to remain in the lingo. But if one draws a parallel back to IBM 20-25 years ago, it would also be a fair guess to say that the product managers of Microsoft's cloud-based services probably have some uphill battles internally in the organization.
The whole development will, however, be interesting to follow. I can't recall any example from the history of software where the "defending champion" on the old platform has won the battle for the new one.