Beyond Binary

LOS ANGELES--When Ray Ozzie penned his Internet Services Disruption memo back in 2005, he had a pretty good idea where the computing world was going. He just didn't know how Microsoft was going to get there.

While many are ready to write off Microsoft as an declining icon of computing's last generation, Ozzie sees Microsoft positioned to leapfrog some of the companies that tend to be thought of as the leaders of the cloud computing world--names like Amazon, Salesforce and Google.

Ray Ozzie on stage at PDC '09.

(Credit: Microsoft)

"I will never, ever, utter the words 'mission accomplished' for obvious reasons," Ozzie said in an interview after his speech at the Professional Developers Conference. "But I'm really pleased with where things are."

It's been a tough journey, to be sure. But Ozzie says Microsoft has changed in ways he could not have imagined. In particular, Ozzie points to Windows Azure--Microsoft's operating system in the clouds. Rather than just offer a set of services to move today's computing programs to remote servers, Ozzie says Azure is designed to handle the applications of tomorrow.

"When we began developing Azure, we developed it more or less with a clean sheet of paper saying, 'What will the operating environment look like for the next 30 years?' Ozzie said. "If you look at VMware or (Amazon's) EC2, what it really is--and I mean to be saying this respectfully--but it's more or less a (virtual machine) hosting environment. It's not a transformational computing environment."

In a lengthy interview with CNET, Ozzie also talked about lessons Microsoft learned from the recent Sidekick outage as well as why people are wrong to count Microsoft out of the smartphone race.

Here is an edited transcript:

Question: From your perspective, where would you say Microsoft is in terms of making the kinds of shifts you talked about in 2005? What is different than you thought it might be?
Ozzie: You know, when I wrote the memo, I really didn't have a crisp plan in terms of how we're going to accomplish it. And I will never, ever, utter the words "mission accomplished" for obvious reasons. But I'm really pleased with where things are. I mean, I think we have a lot of software yet to deliver, but out at the end user perspective, the notion of Office being across phone, Web, and PC, kind of re-pivoting the experience around productivity as opposed to the device, I'm really happy about [that].

I thought users would be more ready for it by this point in time than I think people really are. I don't think in our minds yet we've yet found, quote unquote, the desktop for the Web in terms of our own personal stuff. It's kind of still scattered out there on the Web.

I didn't think that the cloud computing thing--the back-end side--would take off as much as it has. There wasn't as much about that in the memo, but at that same time, you'd probably be amused to see some of the PowerPoint decks that I was shopping around internally at the time with these big pictures of hydroelectric dams and all these things saying there's going to be this recentralization that happens at the back end of computing, but I didn't know how it was going to pan out.

You announced that Azure is going into production January 1. Is the code changing significantly between now and then, or is that just when the billing mechanisms kick in?
Ozzie: What happens is--and this is all just really difficult to explain to people--but we've rolled out big, new data centers. The community technology preview is on a certain sets of servers. Some of those people may or may not opt to become production customers. Getting their things migrated from one set of systems to the other, it's just internal logistics. So, no, the code doesn't change a whole lot, it's more operational processes. And we really don't want to start charging people until we at least have one billing cycle of knowing that everything is right.

You mentioned moving people from one set of servers to another and immediately I hear in the back of my head "Sidekick." Obviously, the architecture is totally different. But can you talk about what you took away from that [outage for the Sidekick device in October]? In one sense, it was a totally other part of the business, at the same time, it was sort of this early cloud service, and a pretty spectacular outage.
Ozzie: There are a lot of lessons to be learned. Let me just preface this by saying it's inappropriate for me to go deeply into it not just for legal aspects and things like that, but because they're T-Mobile's customers, not ours. T-Mobile is our customer. But let me just speak at the abstract level.

There are lessons to be learned in terms of how acquisitions are dealt with. I know that's a non-obvious conclusion, but basically when you're building your own services and when you're building services from scratch, you have a certain understanding because of the people who were involved in that or whatever--of how this thing relates to that thing. When you bring in a company, you tend to think of things differently. And so there were some lessons to be learned there. There were lessons that we didn't learn, (areas where) we know better and I'll just say we weren't using best practices in certain areas.

The biggest lesson is something that I shouldn't have had to learn, and I'll tell you why. In Groove, I took, for the time, a very contrarian view of, no, it's got to be all at the edge. Nothing at the center, it's all peer-to-peer distributed. Then we--and I mean including me--have kind of swung the pendulum to appliance-based computing that's Web-centric, where the truth is in the cloud, so to speak.

One of the fascinating things about the Sidekick recovery process was how wonderful it was that data is also on the devices, because when your confidence level drops in one copy of the data and you have another one, it's really handy. So knowing to treat peer computing and centralized computing are both good, they're both very, very good.

You talked about the cloud as being early days. And I'm curious, there are some folks that have been playing in the space for a while, you know, SalesForce and Amazon and even Google to an extent. What do you feel Microsoft is offering in the cloud that competitors aren't?
Ozzie: When we began developing Azure, we developed it more or less with a clean sheet of paper saying, "What will the operating environment look like for the next 30 years?" If the servers like Linux and Windows NT-based systems and Mac OS, if these are all based on things that were built when I was in school, what's the next one going to look like? That's the most significant advantage.

If you look at VMware or [Amazon's] EC2, what it really is--and I mean to be saying this respectfully--but it's more or less a [virtual machine] hosting environment. It's not a transformational computing environment. All programs in the future will be written in a way that there is no single point of failure. There's no one server that can die and take down the service. And unless you write your applications for a programming model that's inherently parallel, you don't get to that point. And so, yes, we support the same kind of mode that the EC2 or VMware will do where you can take a VM and put it up there, but the reality is you don't get the benefit of cloud unless you use this other thing.

You actually had to go back and add that in. One of the things you talked about today was to take a virtual machine and put it up on Azure.
Ozzie: That's a very good observation. Last year, we introduced, I guess I'll say [something that was] a little too far ahead and we had to back into the present. But I'm extremely pleased about [adding the virtual machine ability] because anytime someone starts playing with [Azure] and they start to get a taste for what it's really like, then you really say, oh, I get it. Now I know how to design the software for that next generation.

You talked about "three screens and a cloud" as a pretty consistent refrain for Microsoft. But we're still not hearing as much about some of those screens, particularly on the mobile side. You mentioned in the spring we're going to hear sort of about the next-generation platform?
Ozzie: Yeah.

A lot of people are saying, you know, Microsoft and the phone--it's been way too long, game over. Why is that not the case?
Ozzie: I think it makes for good copy to take an extreme position that someone is dead or alive or this or that. Yes, iPhone has a lot of momentum, unquestionably. But I think the phenomenon we're in right now is the app phone. And if you look at the depth of apps that are on these phones, they're not very deep. It's not like Office or AutoCAD, where there are just thousands of man years that have gone into developing these apps. They're relatively thin apps that are companions to some service.

And I think if you look at anyone who's building an app phone--whether it's Palm, Google with Android, RIM--ultimately, all the apps that people want will be on all the phones. They're relatively straight porting efforts. I think people are imagining some kind of a barrier to entry, at least from an app perspective that I don't believe is there.

The biggest barrier to entry is: is it a phone that people want to use? And is it a phone that carriers want to sell and people have to measure us based on what we produce. But I don't believe that there's an app barrier.

This year, it seems like you guys have made a conscious choice to focus on Azure and not on some of the more finished services that live one or two layers up. Are you still pursuing the sort of Live Mesh and the Live Platform layers?
Ozzie: Absolutely.

Live Mesh, as a specific case in point, after we got to a certain point in the beta, we said, okay, how are we going to get this to scale from instead of a million or two million people to hundreds of millions of people? So the team and the technology was put into Windows Live and so even though I'm not making a product announcement, when you look at the next version of the Live services that are downloaded to your desktop, I think you'll see the contribution that the Mesh technologies and the Live platform had to that.

In terms of high-level services, no, we're still concentrating [on them]. You know, we still have a very big focus on the Web apps. I think you probably won't hear a lot about that at PDC, but you'll hear some more about that as Office comes more into a broader beta.

Between Pinpoint and Windows Marketplace, Windows Mobile Marketplace, Zune Marketplace--you guys have a lot of marketplaces.
Ozzie: It'll be converging down to two, one for consumers and one for IT and developers. Yes, it's a big company, yes, we have many ways to sell, but ultimately, there should be one place for consumers to buy things online, you should have one shopping cart across this and that. That doesn't necessarily mean one [user interface] to the marketplace because when you're in Xbox, you want to see it through Xbox. When you're on a phone, you want to see it through the phone.

On the PC, I'm still not actually convinced what the right thing is. When you're on a PC, do you want to see the marketplace through the Web or through a client? You know, I can kind of see both. I mean, look at the Zune marketplace, people like being able to buy it through a media-oriented marketplace, but if you were buying apps, it's not really clear. But in any case, there's one marketplace back end that is syndicatable into multiple front ends for the consumer and for the enterprise/IT, and what we were talking about today was really the enterprise/IT one.

It struck me that today, a lot of the story about the cloud has been that it's great for load balancing, it's great for sort of having predictable investment in IT, but there hasn't been as much about what are the benefits when your app is running in the cloud. It sounds like the new project code-named Dallas could be an example of one of those things where you can build a type of application that you couldn't build on premise because you're using someone else's data.
Ozzie: It is the right way of thinking about it. What we're basically trying to say is by agreeing to get together in a certain way, by agreeing on certain guardrails on the road that we'll all drive on, there can be benefits. Right now, there are many pieces of public data, there are lots of commercial data providers and each one has a different kind of a licensing mechanism. Some license by developer, some license by customer, some license by individual user. There are just lots of different terms. And a lot of the big benefits in the data that's out there are what happens when you join them, when you bring them together. And I believe that there's going to be a lot of potential in this.

Will we see Microsoft be kind of one of those first and best customers, bringing a lot of its data and making it available ?
Ozzie: I think the biggest set of data that you'll see us take in many directions is maps. It's the most obvious from a consumer's perspective. You can layer upon it quite nicely. You can layer both apps and other forms of data on it quite nicely.

What are some of the things that people have developed on Azure? Are there any areas of types of applications that have particularly surprised you?
Ozzie: I'm not sure if you noticed some weeks ago, Qi Lu was at Web 2.0 and he announced this Twitter on Bing feature? That is on Azure. And it's one of the most fascinating stories in terms of agility.

A number of people from across the company looked at this thing and said, "Wow, if we had the Twitter fire hose, what could we do with it? Let's start experimenting." And this other lab said, "Oh, well I already know what to do, you actually have access to the fire hose? How could we ever get enough machines put together in time?"

And just in a matter of weeks, you know, this app just came together, people came together, and we had this thing live. And the number from the virtual machines that are processing the incoming feeds, it's fairly astounding. Since that time, other experiments involving 2,000 machines here, 3,000 machines there, are just popping up because people haven't conceptualized what would it be like to have that kind of resources at your disposal.

Are these the kinds of data feeds we're going to have in the future? I mean, Twitter, you have this tremendous data feed, but you can't take in everything, at least not over an extended period of time right now.
Ozzie: In late '05, I guess it was, when I wrote that last memo, I had a theme that I was kind of talking about internally about moving to the cloud experiences and the back end. These days, I'm basically asking people the question: What if everything was recorded, everything? You are recording in your pen there. Some phones have the capability now--or maybe they're just prototypes that we've got--but measure barometric pressure, measure temperature.

Obviously, there are accelerometers. If you can measure everything and you have this aggregated data, what can you then do with it? And I think just getting people to experiment with it will bring us to places that we haven't known before. People concentrate so much on the scary aspect of privacy related to advertising base uses of it, but there are other uses.

From a health perspective, there are many things that I could measure about myself that would be of value to me and no one else, but we still aren't building those apps. It's just too hard to gather all these things.

When you kind of look at where you are, what are the gates to getting where you want as fast as possible? Is it still a matter of evangelizing inside the company? How much is it still a challenge that Microsoft is such a big company that is divided into product teams responsible for the here and now? What are the things that are sort of the biggest gates?
Ozzie: I would say the biggest gate is the same gate it's been for several years, but it's trending in distinctly the right direction, which is prioritization. It's just simply there are a lot of opportunities, there are a lot of different directions that we could go. And left unchecked, every time you do something new, it causes more complexity.

One of the positive side effects, if you will, of the economic downturn is the fact that we've all been forced to make the hard choices.

Microsoft Chief Software Architect Ray Ozzie, speaking Tuesday at the company's Professional Developers Conference in Los Angeles.

(Credit: Ina Fried/CNET)

LOS ANGELES--Microsoft wants you to join it in the cloud.

That's the company's message Tuesday from its Professional Developers Conference here, where Chief Software Architect Ray Ozzie gave the opening keynote address.

Ozzie announced plans for the formal launch of Windows Azure, the cloud-based operating system that lets developers write programs that run on servers in Microsoft's data centers. It will be in production for all users starting January 1, though a few customers will enter production now, Ozzie said.

In other news, Microsoft announced a technology preview of a new data service, code-named Dallas, that lets Azure customers access various commercial and public data sets. Early partners include NASA, the Associated Press, and InfoUSA.

Microsoft also announced another of its city-based code names. Sydney is a security mechanism that lets businesses exchange data between their servers and the Azure cloud. Entering testing next year, Sydney should allow a local application to talk to a cloud application. It will help businesses that want to run most of an application in Microsoft's data center, but that want to keep some sensitive parts running on their own servers.

Here's our live coverage of Ozzie's talk:

8:20 a.m. PST: There's a rap song playing with lyrics that involve floppy discs and spreadsheets. It may be a long morning.

8:23 a.m. PST: Please silence all pagers, cell phones and Windows Mobile devices. "They're both off," the reporter next to me quipped of the Windows Mobile phones. I was going to make some joke about the Sidekick, but I think I'll leave it at that.

8:30 a.m. PST: Ozzie takes the stage, noting how Microsoft first laid out its services strategy about four years ago. (That's when Microsoft launched Windows Live and Ozzie sent his services disruption memo).

Ozzie talks about how last year Microsoft announced its actual products for the space, many of which are hitting the market now.

He also notes the potential of Windows 7 to help get consumers to a more modern code base that developers can target.

"Windows 7 has the real potential to sweep through and reinvigorate the currently fragmented installed base," Ozzie said.

8:35 a.m. PST: First mention of "Three screens and a cloud." That's a phrase we're likely to hear a lot. It's Microsoft parlance for the three most important devices--PCs, phones, and TVs, as well as Internet services that connect all of those devices.

Ozzie also promises Microsoft will improve Internet Explorer--delivering the "best Internet browser without compromise."

Ozzie mentions what we'll hear at PDC--but also a few topics that will have to wait a bit.

He said people will have to wait until spring to to hear in detail about updates to Windows Live. He also said Microsoft will use its spring Mix show in Las Vegas to let developers know how to write code for the next generation of Windows phone.

8:38 a.m. PST: Loic LeMeur, founder and CEO of Seesmic, is talking about how that company is using Silverlight to help it get Seesmic onto more devices. Shows a Silverlight prototype of Seesmic's Twitter application. He also announces immediate availability of Seesmic for Windows.

8:45 a.m. PST: Ozzie shifts to Azure.

"It was only one year ago at PDC '08 that we launched Windows Azure...by launching our community technology preview," Ozzie said.

The technology preview will continue through end of the year. Windows Azure will switch to a production service on January 1. During January, the company will validate and test its payment and billing systems. First bills will be for February usage.

Tens of thousands of developers have used Windows Azure, Ozzie said.

8:50 a.m. PST: Ozzie said that Azure will be hosted in pairs of data centers in each region, starting in January.

In the U.S., Azure will run at facilities in Chicago and San Antonio, Texas. In Europe, Microsoft will tap spots in Dublin and Amsterdam, while in Asia, facilities are in Singapore and Hong Kong.

Microsoft is moving to data centers that house servers not in racks, but in self-contained shipping containers. Microsoft brought one of its containers here to the show floor. (For those not here, check out the piece I did when I toured the Chicago facility.)

A handful of Azure customers are going into production starting today, Ozzie said, including Automattic, the maker of WordPress. Founder Matt Mullenweg now on stage.

8:58 a.m. PST: Mullenweg invites up someone from I Can Haz Cheezburger. The "Cheezburger Network" is launching a new Azure-based Web Site--Oddlyspecific.com--a site devoted to funny and interesting signs.

9:04 a.m. PST: Ozzie announces a new Azure subsystem. Code-named Dallas, it's an open catalog and marketplace for data, both public and commercial.

"Dallas might catalyze a whole new wave of remixing and experimentation for developers," Ozzie said. Dallas can be found on Microsoft's Pinpoint site. Early partners include NASA, InfoUSA, and AP Online.

9:10 a.m. PST: Microsoft shows a demo using 3D imagery from the Mars rover using NASA's "Dallas" data feed. So that's what the 3D glasses on our seat were for.

9:14 a.m. PST: U.S. Chief Information Officer Vivek Kundra joins via satellite to talk about how opening up data can help tap a broader pool of researchers, such as what NASA is doing with the Pathfinder rover data. Anyone who wants to go use the data can go to this Web site, he said.

U.S. Chief Information Officer Vivek Kundra shows off a new job-finder application--on an iPhone--at Microsoft's developer conference.

(Credit: Ina Fried/CNET)

He also shows a career finder application built on government data that can help people find jobs near them. Most interesting is the fact that he is demonstrating the app on an iPhone.

9:20 a.m. PST: Ozzie is summing up, telling people to bet on Microsoft. "When thinking about the experience part of your apps, bet on Windows, bet on Windows 7," Ozzie said. You should also bet on Azure.

"These services are ready for business now," Ozzie said.

Finally, he said, pay attention to all the data that we can now gather.

"Our world and our systems are increasingly wired with sensors, recording tons of data," Ozzie said. But, he said, "this data does no good unless we turn the potential into the kinetic...Let's dream and then let's build."

9:23 a.m. PST: Ozzie is done, handing off to Bob Muglia, president of Microsoft's Server and Tools business.

Muglia begins by trying to explain what is generally understood by the cloud.

"We're all learning together, but one thing that has become really clear is the cloud is more than about infrastructure," Muglia said. "It's also about an application model."

9:25 a.m. PST: Bing runs on more than 100,000 servers. That would be too much to manage using standard server management, Muglia said. The human cost would be too high. Instead, it has an "autopilot" management system.

"When things fail, they just go offline," Muglia said.

9:35 a.m. PST: We're off in geekland now. Don Box, a distinguished engineer at Microsoft, and Chris Anderson, a partner architect at Microsoft, have started coding. I'm pretty sure that most of the people who can understand what they are saying are in this auditorium. (And I'm not one of them.)

9:50 a.m. PST: OK, coding time is over. Muglia is back showing various customers including Kelley Blue Book and Domino's Pizza. Domino's says Azure is nifty because it has peak demand on Super Bowl Sunday that is twice that of any other day.

9:55 a.m. PST: Muglia announces Project Sydney, which allows businesses to connect their own servers with services that are running on Azure. Sydney will be in beta next year.

Muglia said Microsoft has been working on Sydney for a while, understanding that businesses are going to continue to run services in-house and need to connect those to the broader cloud.

10:00 a.m. PST: Muglia also is announcing a beta of an application server for Windows Server called AppFabric. The system will be available in beta next year for Azure as well. (AppFabric combines hosting and caching technologies previously code-named Dublin and Velocity, Microsoft said.)

Microsoft also plans to offer Windows Server virtual machine support next year, Muglia said.

10:03 a.m. PST: Microsoft's press release for the Day 1 keynote is out. Among things I haven't mentioned, Microsoft has finalized the code for its Windows Identity Foundation and is announcing the beta of ASP.Net MVC2 (now that's a mouthful).

10:30 a.m. PST: Muglia is wrapping up. Reiterates that Visual Studio 2010 is coming in the first half of next year. An updated version of System Center that helps manage private clouds and helps start to span into hosted and public cloud environments will be in beta next year.

Muglia also clarifies that Azure's second European and both Asian data centers will come on line next year.

"We're investing in this infrastructure all around the world so you don't have to," Muglia says,

Keynote ends.

When Ray Ozzie first landed at Microsoft in 2005, he found a company with lots of good ideas. He also found things were getting in the way of innovation, everything from businesses that weren't thinking about the broader company strategy to the way Microsoft stationed each of its workers in their own office.

As the new chief software architect set out to work on Microsoft's cloud-based strategy, he also started doing his part to shift that corporate culture. To house his team, Ozzie had Microsoft tear up its typical floor plan. Instead of tons of hallways and offices, Ozzie wanted lots of common space and whiteboards everywhere. Once a notable oddity at Microsoft, such work areas have become increasingly common in recent years.

Ray Ozzie, chief software architect,
Microsoft

(Credit: Microsoft)

Ozzie also quickly set to work on changing Microsoft's product development, first detailing his plans publicly in a 2005 memo, titled the "Internet Services Disruption."

In the missive, Ozzie talked about the emergence of advertising as a business model for software, new ways of delivering software, and the need to make things simpler in an era where users are inundated with technology choices. Ozzie and company Chairman Bill Gates talked about a wave of "Live" software that would extend Microsoft's products with new Internet-based services.

Ozzie challenged the company that it was faced with new challenges and aggressive competitors that threatened its cash cows, but was careful to only rock the boat so hard.

"In assessing where we are and where we need to be, some new efforts will surely require incubation," Ozzie wrote in 2005. "But in many areas we have 80 percent of the product and technical infrastructure already built--we just need to close the 20 percent gap."

The extent to which Ozzie has managed to reshape Microsoft's product and culture since then will be on display this week, as Microsoft hosts a major conference for its developers in Los Angeles.

Azure, Office unveilings
At the Professional Developer Conference, as the event is known, Microsoft is expected to announce the commercial launch of Windows Azure as well as a beta version of its Office 2010 software. Ozzie is set to speak on Tuesday, while office unit senior vice president Kurt DelBene will be part of Wednesday's keynote address.

(Credit: Microsoft)

The arrival of those two products shows just how much has changed since Ozzie's memo.

Shown for the first time at last year's PDC, Windows Azure is the operating system re-imagined for the cloud computing era. Instead of controlling a local PC or server, Azure is designed as a platform where developers write programs that run from inside Microsoft's massive data centers. Microsoft and customers have been testing Azure since then as part of a free technology preview. Starting in February, though, Microsoft plans to start charging based on how much computing resources a customer is using.

Office, while one of Microsoft's core products, is in the midst of a major shift. Amid competition from Web-based rivals such as Google Apps, the product is morphing into a number of different forms, everything from the traditional desktop suite, to a hosted Web service, to free browser-based applications.

Showing off other wares
Beyond Azure and Office, Microsoft will also be talking about other topics ranging from identity systems to developer tools.

It will also be showing some new technology coming out of its labs--highlighting some closer ties between the company's research unit and its product groups.

Live Labs head Gary Flake is scheduled to show off "a new approach to exploring information on the Web."

Meanwhile, Microsoft's Seadragon unit is showing off a couple new projects. Seadragon is known for a "deep zoom" technology that allows a user to dive into an image, going from a wide angle to the finest grain of detail.

One of the group's new efforts--Snapdragon--is designed as a new concept approach to image search. "Snapdragon utilizes Flickr images to prototype what image search would be if, instead of searching, we allowed users to explore images and the relationships between them," Microsoft said on its Web site.

The other is a collection of work by artist Chris Jordan. Jordan's work is particularly well suited to Snapdragon's deep zoom since it uses thousands of everyday objects to create a broader image. In one picture, for example, Jordan uses thousands of cigarette packs to recreate Van Gogh's smoking skull portrait. In another, Jordan uses soda cans to recreate a Seurat painting.

But more than any one product or technology, PDC will serve as a chance to check back and see what impact Ozzie has made with that 2005 memo and in the years since.

For some groups, Ozzie's memo was a codification of what they were already doing. Corporate vice president Dave Thompson, who was running Microsoft's Exchange team at the time, said his group was already moving in that direction--having already bought FrontBridge and PlaceWare--acquisitions that became Live Meeting and Exchange Hosted Services. Plus, Microsoft had started its pilot program with Energizer to see what other sorts of services it might be able to take on for large businesses.

"When Ray sent his memo, it was a broad call-to-action that was a great affirmation and a rallying point for the efforts already underway," Thompson said in an e-mail interview.

But Ozzie acknowledged that the shift to services--and the transition from Bill Gates' style to his--was more jarring for others.

"My engagement style is far different from Bill's," Ozzie said in a recently published interview with analysts from Gartner. "For a number of groups, that has worked out really well. With others, there are challenges. Some people have a different style or a different view of how they want to take it."

Ozzie says that Gates was supportive of the places that his successor wanted to take the company, but also said that neither he nor Gates really knew how to get there.

"In those days, I had conversations with Bill and he'd say, 'Well that's pretty dramatic or radical in terms of what you are trying to accomplish. It's the right thing to do and if you do it, that will be great,' " Ozzie recalled in the Gartner interview. "And I said, 'How?' And he'd say, 'I don't know. It starts with a memo, and I don't know what happens after that.'"

Nonetheless, Ozzie says, Microsoft has gotten where he hoped the company would get. "When I look back and I read the memo, so many of the things that I had written have come to pass, not because I drove them to make it happen, but because the organization made it happen. It may have happened a little differently here or there, but it happened. So, I'm very pleased about that."

Of course, CNET News will be on hand to see what else Ozzie and team have in store, so check back throughout the week to catch our live, ongoing coverage of the event.

CHICAGO--On the outside, Microsoft's massive new data center resembles the other buildings in the industrial area.

Even the inside of the building doesn't look like that much. The ground floor looks like a large indoor parking lot filled with a few parked trailers.

It's what's inside those trailers, though, that is the key to Microsoft's cloud-computing efforts. Each of the shipping containers in the Chicago data center houses anywhere from 1,800 to 2,500 servers, each of which can be serving up e-mail, managing instant messages, or running applications for Microsoft's soon-to-be-launched cloud-based operating system--Windows Azure.

Upstairs, Microsoft has four traditional raised floor server rooms, each roughly 12,000 square feet and consuming, on average, 3 megawatts of power. It's all part of a data center that will eventually occupy 700,000 square feet, making it one of the world's largest.

"I think, I'm not 100 percent sure, but I think this could be the largest data center in the world," said Arne Josefsberg, general manager of infrastructure services for Microsoft's data center operations.

Even with only half the site ready for computers, the center has 30 megawatts of capacity--many times that found in a typical facility.

On a hot day, Microsoft would rely on 7.5 miles worth of chilled water piping to keep things cool, but general manager Kevin Timmons smiled as he walked in for the facility's grand opening in late September. It was around 55 degrees outside.

"When I stepped out, I said 'what good data center weather'," he said. "I knew the chillers were off."

Although Microsoft is open about many of the details of its data centers, there are others it likes to keep quiet, including the site's exact location, the names of its employees, and even which brand of servers fill its racks and containers.

The software maker also won't say exactly which services are running in each facility, but the many Bing posters inside the upstairs server rooms in Chicago offer a pretty good indication of what is going on there.

Microsoft originally intended to open the Chicago facility last year, but the company has slowed its data center pace some amid the weaker economy and an array of cutbacks companywide. Instead, the facility had its grand opening in late September.

Of Sidekick--and Azure
Within a month, though, Microsoft's data centers were attracting attention for a wholly different reason. A massive server failure at an older facility--one that Microsoft acquired as part of its Danger acquisition--left thousands of T-Mobile Sidekick owners without access to their data as part of an outage that is now stretching into its second month.

Although Sidekick uses an entirely different architecture, the failure represented a tangible example of the biggest fear of cloud computing--that one will wake up one day to find their data gone.

Photos: Inside a Microsoft data center

Microsoft is quick to highlight the differences between the Sidekick setup and what Microsoft is building in Chicago and elsewhere. "We write multiple replicas of user data to multiple devices so that the data is available in a situation where a single or multiple physical nodes may fail," Windows Azure general manager Doug Hauger said in a statement after the Sidekick failure.

As for Azure, Microsoft is expected to talk about its commercial launch at this month's Professional Developers Conference in Los Angeles, including offering more details on how the system will provide its redundancy. Microsoft has already announced some new Azure details, noting last week that it will begin charging for Azure as of February 1.

Microsoft is still trying to figure out just how much capacity at Chicago and elsewhere it needs to assign for Azure.

"Azure is incredibly hard to forecast," said Josefsberg. "We're probably erring toward having a little more capacity than we need in the short term."

What is clear is that, over time, Microsoft will need even more capacity. That's what has Josefsberg returning to a custom "heat map" that figures out the best place to build data centers based on factors including cheapness, greenness, and availability of power, political climate, weather, networking capacity, and other factors. Choosing the right spot is critical, Microsoft executives say, noting that 70 percent of a data center's economics are determined before a company ever breaks ground.

Josefsberg said he already has the next spot picked out.

"We know exactly where it is going to be but I can't tell you right now," he said.

But Microsoft has indicated how the next generation of data center will improve upon the Chicago design.

Moving to containers allows Microsoft to bring in computing capacity as needed, but still requires the company to build the physical building, power and cooling systems well ahead of time. The company's next generation of data center will allow those things to be built in a modular fashion as well.

"The beauty of that is two-fold," Josefsberg said. "We commit less capital upfront and we can then accommodate the latest in technology along the way."

Microsoft is set to announce on Monday that it is ready with a second beta version of its Visual Studio 2010 and .Net Framework 4.0 developer tools. Both products are set for a final release on March 22, Microsoft said.

"Microsoft has reached the home stretch for Visual Studio 2010," said Dave Mendlen, a senior director in Microsoft's developer division. "This is probably the biggest release we've had in many years."

Among the product's features is a Tivo-like recording feature that Microsoft has now dubbed "IntelliTrace."

"That's our time machine," Mendlen said. "We're very proud of that."

Other features new to the 2010 release include support for Windows 7 and Windows Azure as well as tools for building on top of Microsoft's Sharepoint product.

With Visual Studio 2010, Microsoft is also taking the opportunity to scale back the number of different versions it sells, cutting the number of subscription options from seven to three. In a telephone interview, Microsoft Vice President S. "Soma" Somasegar said that move came from customer requests.

They told us "one place you can do better is making it simpler how you package your products," Somasegar said.

Under the new plan, myriad Visual Studio options will be consolidated into Professional, Premium, and Ultimate. Microsoft is planning an "ultimate offer" promotion that will give many current subscribers access to the next-higher version of Visual Studio as well as 750 Windows Azure compute hours per month. Next year, the company plans to change that to offer varying amounts of Azure compute time based on the level of the Visual Studio subscription.

The massive data failure at Microsoft's Danger subsidiary threatens to put a dark cloud over the company's broader "software plus services" strategy.

A key tenet of that approach is that businesses and consumers can trust Microsoft to reliably store valuable data on their servers.

T-Mobile Sidekick Slide

(Credit: Corinne Schulze/CNET)

A week ago, though, Microsoft's Danger unit experienced a huge outage that left many T-Mobile Sidekick users without access to their calendar, address book, and other key data. That's because the Sidekick keeps nearly all its data in the cloud as opposed to keeping the primary copy on the devices themselves.

Things got even worse on Saturday, as Microsoft said in a statement that data not recovered thus far may be permanently lost. It's not immediately clear how many people lost their data. The outage earlier in the week affected a broad swath of Sidekick users, though many had data return during the week.

While outages in the cloud computing world are common (one need only look at recent issues with Twitter or Gmail), data losses are another story. And this one stands as one of the more stunning ones in recent memory.

The Danger outage comes just a month before Microsoft is expected to launch its operating system in the cloud--Windows Azure. That announcement is expected at November's Professional Developer Conference. One of the characteristics of Azure is that programs written for it can be run only via Microsoft's data centers and not on a company's own servers.

It should be pointed out that the Azure setup is entirely different from what Danger uses: the Sidekick uses an architecture Microsoft inherited rather than built (Microsoft bought Danger last year). Still, the failure would seem to be enough to give any CIO pause.

Update, 2 p.m. PT, 10/11/2009: I asked Microsoft for comment Saturday when I was writing this, in particular as to how the rest of its cloud might differ from the Danger set up.

Microsoft said Sunday that its the fabric controller that manages the Azure service is built with redundancy in mind.

"We write multiple replicas of user data to multiple devices so that the data is available in a situation where a single or multiple physical nodes may fail," Windows Azure general manager Doug Hauger said in a statement to CNET News.

That doesn't mean Azure is immune from data loss, though I'm told an entire data center would have to be wiped out, as opposed to just a server or collection of servers. I'd be interested to know whether Microsoft will also offer multiple location options so that users that want to can have their data in more than one physical spot as well.

But that's just one of many questions raised by this spectacular failure. Among the other questions still looming large in my head are:

1. What backup procedures did Danger have?

2. Just how many of T-mobile's Sidekick customers lost their data? (Feel free to let me know, Sidekick users.)

3. What impact will this have on the Pink project, which was largely seen as the evolution of the Sidekick, and some say was already in trouble?

4. Will this hurt Microsoft's efforts to build a brand around the notion of Windows Phone even though that uses a different architecture (with its own challenges, to be sure)?

Microsoft's Chicago data center offers a merge of old and new techniques. The ground floor features sealed containers with tightly packed racks of servers, while the second floor houses more traditional server rooms.

(Credit: Microsoft)

CHICAGO--On most days it takes the right access badge and a biometric scan to make it inside the doors of Microsoft's massive data center. But on Wednesday, the company allowed a group of reporters, customers, and partners to tour the 700,000 square foot facility.

The data center, along with another just-opened facility in Dublin, Ireland and existing centers in San Antonio and Quincy, Wash., serve as the guts behind Microsoft's online ambitions, from Bing to Hotmail to Windows Azure.

But, for all its strategic import, the ground floor of the Chicago plant looks more like a truck parking lot than a traditional data center. In each parking spot, though, Microsoft can drop off a container packed with up to 2,000 servers.

Right now, only about a dozen of the 56 container spots are filled, but Microsoft executives said they expect that to change quickly. The software maker expects to eventually spend up to $500 million filling up the Chicago site with gear.

The site was originally slated to open months earlier, but Microsoft delayed things due to the economy. Eventually, though, it decided to move forward.

"Investing in these uncertain economic times is always a tough choice," said Arne Josefsberg, general manager of infrastructure services Microsoft's data center operations. But, he added, "We take a very long-term approach to the business.

The data center itself is housed in an unmarked warehouse in one of the Chicago area's many industrial districts. (The software maker didn't want the exact location disclosed.)

Microsoft picked the spot because of its convenient spot close to cheap and abundant power as well as the fact it sits atop a major Internet connection point that houses major east-west and north-south fiber routes.

"It's a lot about location, location, location," Josefsberg said.

I'll have a ton more to say in a follow-up post, including a bunch more pictures and some video interviews, but I wanted to share a few initial thoughts before hopping a plane to the Seattle area, where I will be working for the rest of the week.

Microsoft said on Friday that it plans next month to end support for a test version of its Live Framework, which was essentially the developer side of its Live Mesh service.

The idea of Live Framework is to give developers of Web-based applications the ability to add desktop components, while those writing traditional applications could use the Live Framework to add synchronizing and other online capabilities.

In a blog posting, Microsoft said it plans to integrate many of the concepts behind the Live Framework into the next version of Windows Live. In the mean time, though, developers will lose access to the test version of the Live Framework as of September 8.

"The Live Framework will be integrated into the next release of Windows Live. Stay tuned to Dev.live.com for more details in the future," Microsoft said in its blog. "If you are a Live Framework technology preview user, we ask you to please download any data and/or code from the service prior to September 8th as well as remove your devices from the service."

Developers can expect to hear more about where Microsoft plans to go with Live Framework at this November's Professional Developer Conference.

Microsoft rolled out the Live Framework as a community technology preview at last year's Professional Developer Conference, though its launch was somewhat overshadowed by the debut of Windows Azure. At the time, Microsoft said it was supporting both platforms, with Azure being a more basic set of building blocks and the Live Framework a collection of more finished services.

Microsoft's consumer-facing Live Mesh application is not affected by the move, Microsoft said.

Organizationally, Microsoft moved the Live Mesh effort into the Windows Live unit at the beginning of the year.

One of the limiting factors for Windows Azure--Microsoft's operating system for the cloud--is that it only runs in Microsoft's data centers.

Some have wondered why Microsoft doesn't just package it up and offer it as something that businesses or hosters can run in their own data centers.

Server and Tools head Bob Muglia on Tuesday announced pricing and other details for Windows Azure, Microsoft's cloud-based operating system.

(Credit: CNET News)

Server and Tools boss Bob Muglia said in an interview Tuesday that Windows Server will start to take on attributes of Azure, but said there are good reasons why Azure doesn't make sense as a standalone product.

The main reason, Muglia said, is that it isn't built to offer choice. Because Microsoft knows exactly the hardware that will run on Azure, it hasn't built it to support different kinds of hardware or software.

"Windows Azure obviously runs in our own data center," Muglia said. "It is very much restricted. It only needs to run the hardware that we are trying to run on. It's not really appropriate for us to deliver it to customers in that form."

Businesses and hosters will want to offer their own clouds he said, and Microsoft will have tools for them, but Azure isn't their answer. Instead, he said, Windows Server, System Center, and Virtual Machine Manager will get a lot better at operating in a cloud-based environment, while still offering customers lots more choice.

"We will be taking our Virtual Machine Manager product and evolve it over time to much more straightforwardly allow customers to build their own private cloud," Muglia said.

Just because they will remain separate products, though, doesn't mean there won't be overlap between the Azure and Windows Server teams, he said. He noted that Windows Server 2008 R2, the version of Windows 7 for the server, has the ability to boot from a virtual hard drive--a feature developed by the Windows Azure team. Conversely, Azure supports applications written in PHP, a feature that it was able to offer because of work the Windows Server team had done in its last release.

Both Windows Server 2008 R2 and Windows Azure are set for release in the coming months. Microsoft announced Azure pricing on Tuesday and said it will launch commercially at Microsoft's Professional Developer Conference in November. Meanwhile, Windows Server 2008 R2 is set to be available to volume license customers September 1, the same time as Windows 7.

As for Azure, rival Salesforce.com had some hard words on Tuesday.

"When Microsoft, the company that has the most to lose from cloud computing, enters the market, you know that 'The End of Software' has arrived," Salesforce.com VP of strategy Bruce Francis said in an e-mail. "However, instead of solving the problems of the cost and complexity of client server, Microsoft is just moving those problems to the cloud. We believe that Azure will do for cloud computing what the Zune has done for media players."

But Muglia said that Azure is actually leading the way by allowing companies a way to move to the cloud that doesn't make them create whole new ways of writing software.

"There are many millions of customers today that are running very business critical applications today in the server environment," Muglia said. "We are focused on providing those customers with a smooth easy on-ramp into the cloud where they can leverage their skills and get the scale-out benefits the cloud will provide."