Microsoft vs Google in Cloud Computing

Many took note of the Randall Stross essay in the New York Times last weekend. In it he succintly described why Microsoft is failing in it’s attempt to bridge the next major shift in the computing industry. The cloud computing relevant points seem to be:

1) Microsoft’s online services aren’t doing well at all. The last time it made money online was fiscal 2005. Microsoft’s online business actually lost $74 million last year.

2) Google–which makes about 90 percent of its revenues from online advertising–made $1.5 billion in 2005, $3 billion in 2006, and $4.2 billion in 2007. “Google’s share of searches in the United States has increased to almost 67.9 percent in March 2008 from 58.3 percent in March 2006. During the same period, Microsoft’s share has dropped to 6.3 percent from 13.1 percent.”

With another view on Microsoft, Chris Capossela, Microsoft SVP, made the following comments:

• [Microsoft]will see more and more companies abandon their own in-house computer systems and shift to “cloud computing,” a less expensive alternative.
• [Microsoft] plans to be “agnostic” by offering customers the choice between a traditional licensing model or a subscription-based service model embraced by rivals like Salesforce.com and Google.
• “In five years, 50 percent of our Exchange mailboxes will be Exchange Online,”

No wonder they need Yahoo.