The Fight for the Future of Cloud Computing

By Scott Ferguson
2008-10-21

While Google and Microsoft have each developed very different business models and attitudes toward consumers and the enterprise, both companies are preparing to clash when it comes to how the world’s cloud computing infrastructure develops in the next 10 years. While Google and Microsoft might fight for dominance in the cloud, it’s not clear which company will win or if a third company might succeed.

ORLANDO, Fla. – When it comes to building out cloud computing infrastructures in the next two years, two of the world’s largest and most formidable IT companies – Google and Microsoft – are preparing to pour money and resources into developing significantly different models of how this type of computing should look and feel.

While it’s not surprising that Google and Microsoft are preparing to clash in other fields besides search and advertising, the two companies’ attitudes toward the cloud and the different approaches were dissected at the Gartner Symposium/ITxpo here.

At its most basic, cloud computing offers customers the ability to have their applications supported by third-party vendors and those applications are then delivered to the user through the Internet. Enterprises, such as Amazon, Google and Microsoft, can also develop their own cloud computing infrastructures for their internal applications.

While the cloud is still a somewhat undefined area, the types of technology that Google and Microsoft are developing could shift the way businesses, and even consumers, use the cloud for their needs. Part of this clash for the future of the cloud comes from the different business models that Google and Microsoft developed. While Microsoft has worked mainly in the enterprise and built its reputation on its operating systems and offerings such as the Office suite, Google has been more consumer focused and has relied on advertising revenue to bolster its search capabilities.

In the case of Microsoft, David Smith, a Gartner Fellow, believes that Microsoft is looking to become a force in both the internal cloud, which businesses will build to support their own applications and computing resources, and the external cloud, which are developed by third-party service providers such as AT&T.

“With Microsoft, the goal is to support both in a sort of hybrid model that takes advantage of both models,” said Smith. “Virtually all Microsoft software until recently, especially for enterprises, has been either client-based or on-premise software. However, they are gradually moving much of that to a cloud offering.”

The evidence of that shift in strategy, Smith said, is a number of new products Microsoft has brought into the market or will bring in the coming years. These include Microsoft Dynamics CRM Online, Live Mesh and platforms such as “Oslo” and “Titan.”

For Google, the opposite is true. Most of the search giant’s applications products are offsite on the server level. At the same time, more and more applications are being developed and deployed within Web browsers, which appears to have been one of the motivations behind Google’s launch of Chrome earlier this year.

“The reason for Chrome is to stimulate development in this space, to speed up Java script, to speed up off-line support and there are some reasons that are harder to understand but they are there and they have to do with the control of advertising,” said Smith.

At the same time, Tom Austin, also a Gartner Fellow, sees Google developing its own platforms for the cloud, such as Google App Engine, which allows for the building and hosting of applications on Google Web servers. In addition, Google has turned to IBM to help it develop technology, especially within the cloud, that will give those applications more of an enterprise edge.

In the march toward the cloud, Google and Microsoft are being driven by five technologies, according to Gartner. These are SAAS (software as a service), open source, Web 2.0, consumerization and “global class,” which is a new way to deliver computing services.

What might leave some industry observers frustrated is that the battle between Microsoft and Google might not leave a clear winner, according to Gartner. Google and Microsoft might wind up splitting this new space between them with each playing to their strengths. At the same time, a third company might hold the key toward developing the cloud. Smith and Austin reminded the audiences that Yahoo remains a factor in all these decisions, and Smith believes that a deal for Microsoft to buy Yahoo will still happen.

As for IT managers, Smith and Austin urged them to begin evaluating and testing Web-based applications now as these applications are still being developed.