Another concern is the lack of client side control. In previous years, Microsoft's market domination was, in part, due to the proliferation of the Windows client. Today, thousands of customers use smart phones to access application services such as e-mail. If the customer can retrieve their e-mail using an iPhone, does it matter if the back-end application is Microsoft Exchange or not? If clients can access their account, does it matter if the back-end server is using SQL Server or not? Customers don't care whether the application is running on Azure or Google App Engine or Fiddlety Sticks. Customers simply expect service.

But perhaps the greatest concern—and biggest threat to Microsoft— is the potential developer community movement to another application platform. Several SaaS companies are already attacking Microsoft on the application side (offering online email, productivity suite, messaging, collaboration). By offering PaaS, Google, Force.com, and Oracle are attacking the very heart of Microsoft, threatening Microsoft's business at its core.

That's why I believe Windows Azure is good move (perhaps Microsoft's best move into cloud computing,) because it leverages their strengths. Given the immaturity of the PaaS cloud market, Microsoft's timing is good and in the end, it was a move they had to make.

Drue Reeves is the Vice President and research director for Burton Group Data Center Strategies. He covers server platforms and blades, storage virtualization, storage platforms and protocols, enterprise and system management, data center power and cooling. Prior to joining Burton Group, Drue was defining strategy for scalable enterprise architecture while part of Dell's CTO office.

© 2009 CXO Media Inc.