For the average mum and dad I actually think they would initially realise they're using the cloud, directly as in its conceptual stage, you'd be using it through some application so you conceptualise things that they already use as an application that runs in the cloud.....
Sky drive is a great example of an app that runs in the cloud so you can store your files in a storage location in the cloud, and that way you can roam about and get access to your files anywhere as they [the files] not your particular machine, they're in a third location so you can think of hot mail as an app so you're using the cloud but you're really not thinking you're using the cloud, you're doing email. In so many aspects what's important is the app and the usage cases, not the cloud.
PP: Okay, so Is it a real deal or is it whole Cloud thing yet another load of tech industry hype and buzzwords?
TN: I think we had those kind of debates in the early day of the internet too.. is it just a buzzword, and I think now very few people dispute the fact the internet was pretty profound and foundational.
For the most general consumers they don't know they're using the internet, because they're using FaceBook, they're sending email, they're using whatever services and apps they choose... but whatever they're using, it's an infrastructure and a technology but we are totally convinced that it is as profound as the internet has been and we don't think of cloud as a buzz word at all, particularly for people who are in a position to develop these apps and services to be consumed by consumers.
PP: So for businesses, what is the big deal with this whole cloud thing?
TN: From a business perspective businesses again don't necessarily think of IT as something that they focus on, they want to get business results out of it, and so they want to get innovation, they want to have more agility and they want to introduce products faster, to go to market faster. They want to be more efficient and IT is a key ingredient in supporting that. I guess IT is a very strategic asset in helping the business be successful and cloud is a key asset and lever to help IT be successful in supporting the business.
So when you think about the agility that a cloud supports Imagine you've developed a new product that's gone viral on the web or maybe a marketing campaign that's been too successful, you have a problem because lots of people are wanting to consume your product and you need to be able to dynamically scale up, and most businesses have this level of dynamism where the demand patterns and the usage patterns aren't stable.
Maybe it's the quarter end, maybe it's the pizza orders on the night of the Superbowl so a lot of the demand curves that businesses face aren't stable.. and so then if you want to have IT capabilities to service all of these needs, being able to have an elastic way to consume what you need as opposed to having paid for a capital expenditure for a high water mark and have it sit all idle throughout the rest of the year where it is not actually at that capacity is a key benefit, Cloud just makes a lot of business sense, and it really maps to the consistent desires a lot of businesses customers have always had for consuming IT more like a service rather than it being a fixed cost they have to amortise over a long period of time.
PP: Can you give me a couple of scenarios where a small business operator will benefit from basing their business apps in the cloud?
TN: I also predicted two categories, one is what I would call horizontal things that almost all small businesses need.. as you know small businesses are super diverse they are in so many businesses their business processes are so different and their clientele are different but there are very common horizontal like storing files storing data doing email, the horizontal sort of productivity oriented scenarios. It's an area where I think the cloud can be very successful in the sense that even still a lot of small businesses are using very old email systems or have no email at all - so being able to have a cloud service (and our offer in that space - office 365 is seeing great traction) there and those kind of horizontal productivity services where you can do email, communicate and store data for a broad set of purposes is one category
For the other I think there are very specific business pain points that small businesses have that is very pertinent for their business and that is where our partners come in because small businesses are typically characterised by not having a lot of IT resources out their disposal.
So the partner basically then are the people who develop applications to help small businesses to be successful and the types of applications that small businesses use are just so diverse, that's why the partners have solutions of every kind to help them do that.
From the perspective of the person providing the solution cloud provides that kind of a benefit in being able to have an offering go to market quickly and then grow their business to serve their customers as the demand scales as opposed to investing everything up front and the customer can benefit from the many of the attributes of the cloud.
That data is always in the cloud it's so you can get access to your information from anywhere and data is always consistent as you don't have multiple copies on different devices...
PP: So there's a disaster recovery aspect? that's really relevant to New Zealand where we recently had a large quake in Christchurch and then there's Fukushima too...
TN: Yes definitely, in the sense that in Japan after the disaster, what they call business continuity has become a very big topic and if you want to think about how do you always make sure you have your customer data that's secure and capable of surviving disasters.. previously doing disaster recovery for small business was not within the reach of most small businesses, and backing up another hard disk right next to your PC isn't a particularly good disaster recovery strategy.
With the availability of cloud services, those things get taken care of by the applications that you use and those capabilities become reachable and available to small business, even those without a lot of IT needs.
PP: So you've been with Microsoft since the Windows NT days?
TN: [Laughs] Uh Yes
PP: You must've seen a lot of big tectonic changes in the industry, what's the most significant you've seen?
TN: Well how far we've come is truly stunning. When I started in windows NT, NT server did not even support what the industry called clustering, having multiple servers sharing a disk so that if one goes down the operation can go on, yet now we're talking about the cloud and migrating virtual machines from one machine to the next, so the advances in technology that we've made just within my tenure within Microsoft has just been amazing
PP: So what changes are most exciting?
TN: well it's not one change per se, it is always exciting to see partners or customers doing things that were just not possible before, that's wow! You wouldn't have thought of doing this before but now you're doing it.... there are many many examples of how technology, not for technologies sake but the notion of technology as an enabler, doing things that people just didn't think to do before is really exciting
PP: Gazing into your crystal ball, what are the big trends you see over the next few years?
TN: there's a couple of trends that I think are the most observable, One's around this notion of the consumerisation of IT - You have multiple devices, more people are using more devices and they expect to be able to use these devices, many of them are personal devices, gone are the days of where the only device you used is the company provided PC, a lot of people still have them, but they also have their personal PCs and personal devices and then the expectation is that they can use all of those to conduct business as needed and get kind of a personalised experience and that's one major trend we're seeing.
PP: So Bring your own device is a key trend
TN: Yeah, and another one could be around the explosion of data. We talk about this every year, and it becomes increasingly more true every year in terms of the amount of data that customers are now managing, and it's not just the transactional logs for the ERP systems for enterprise customers, but it it's also sources such as social media. What are they talking about in the twitter-sphere, and what's my share of voice on the web are key questions.
Some firms are now supplying companies with logs of this, so the question becomes one of how do you actually manage that data, and more importantly, how do you get insights from them - All that data is kind of useless if you can't make sense of it and make interesting decisions, and so bringing all these disparate data sources together and then querying them to get insights in a visually compelling human understandable way is the other big trend we see
Of course there's cloud computing as an enabler for many scenarios, and addressing the need for customers who want to move to consuming IT more as a service as opposed to having a big capital expenditure for a highly volatile scenario and always preparing for the high water mark... Then there's the emergence of new applications that are oriented to more mobile and social scenarios
PP: So what's your favourite app currently installed on your phone?
TN: Well for me I am from the world of office so all those collaboration applications are something I'd use every day - not just email but instant messages and social updates and things like that. For me the interesting thing is this notion that all these devices - even those personal devices are now being expected to participate in business processes such as being able to just do simple stuff like approving expense reports on your phone which is fundamentally a personal device so IT needs to be able to have the capability to be able to decide what kind of data and applications are available on which device in a sophisticated way so you can do particular thing on a particular device. The same person may not be able to the same thing on a different device that is inherently less trusted.
The big thing is that all of the trends are fuelled by a fundamental change in what I think of as the building blocks of computing, you know more processing power available everywhere in small devices and even in the largest data centres and more cheaper and more available and storage and faster network.
So the core building blocks of IT are evolving at a rapid pace and so you see these trends but at its core it's the fundamental change of compute, storage and network, so for us, the way we think about it is that a patchwork of point to point solutions isn't the best way to solve this problem.
You need to kind of really need to think about what is a platform evolution such as cloud OS and having a much more holistic approach in this era of the cloud so the notion of what an operating system is really needs to be defined, it's not a piece of software that runs on a PC or a server, but it is something that abstracts hardware at a data centre level and helps applications run at a much more higher scale and that's what makes it exciting to be in our business... we know people are going to use more devices and more devices are going to get smarter and all of those smart devices will have to be fed intelligence and be managed which means that there is a need for a cloud OS
PP: Is Link, Skype and Yammer likely to be a part of Microsoft's cloud strategy going forwards?
TN: we're certainly excited about them, but I'm probably not the best person to talk about exactly where things are, but I think there is a good vibe for us - even amongst the press around the momentum we're gaining in this space.
PP: Looking at what Microsoft is doing in the cloud, what are the big tools/apps that Microsoft centric businesses should look at using, and why?
TN: Selfishly speaking for me we announced yesterday we talked about how windows 8 is coming and windows server 2012 is also coming, we'll have the R&D finished on that product in September.. the market anticipation for Server 2012 has been strong and we've had over 500,000 downloads of Windows server beta and for me that's exciting
PP: If I was to list the top 5 benefits of being a business and going with the cloud, what would they be?
TN: that really boils down to how you can consume applications and services in a much easier way rather than having to buy server equipment, rack it up, configure it and manage it.. instead of that, you can just go to a website sign up to a service and get going straight right away and see if it works is probably the no.1 advantage
You can try it and see if it works and if you don't like it you can stop using it so the risk of trying it out are quite minimal so being able to extend your business and innovate more faster is a huge benefit.. You also spend less time thinking about IT but can focus on doing business.
PP: What about negatives with the cloud? Are there any, if so what are they?
TN: I think it's more like the industry maturity and the learning that we're going through. remember the early days of the internet and we all debated that "consumers would never give up their credit card information to do e-commerce"
PP: Boy has that changed!
TN: It has, and I think most people agree that has changed and so some of it is more to do with people's perceptions whilst some negatives could also be legal in that there are regulatory and compliance issues that customers have to think through and often these issues are to do with how to interpret laws that were written in an era when we didn't have the technology we have today.. I don't necessarily consider these as negatives... it is just all part of a learning process but I think the internet is a great lesson that says with sufficient benefit and compelling reasons those [the negatives] can all be overcome.
PP: Thanks for your time
