Outside the Lines

Steven Levy writes about Microsoft Chief Software Architect Ray Ozzie in the latest issue of Wired. The nearly 7,000-word profile doesn't offer many new revelations about the software-plus-services or cloud-computing efforts that Ozzie is leading at Microsoft, but it provides a vivid portrait of Ozzie's path from the University of Illinois in 1973 to taking over Bill Gates' software czar responsibilities in 2005.

Following is an excerpt from Levy's profile characterizing the Gates-Ozzie relationship:

Ozzie left IBM and founded a startup called Groove Networks, which made collaborative software. Released in 2001, the Groove app was terrific technology, with peer-to-peer transmission and superstrong crypto built in. But the postbubble timing was awful, and Ozzie realized that the company couldn't make it on its own.

The obvious move was to sell to Microsoft, which had already invested some $50 million in Groove. For Gates and CEO Steve Ballmer, however, getting the technology was just a bonus; the real treasure was its founder. Gates had once described Ozzie as "one of the top five programmers in the universe." Former Groove employees still talk about the time Gates visited and the two leaders got off on a tangent about some arcane technical point. As they bounced improvisations off each other, Ozzie coming up with ideas and Gates rocking back and forth with excitement, it was like watching some propellerhead version of a John Coltrane-Miles Davis performance. Ozzie wouldn't be just a great hire--he would be the hire, the one person qualified to be a partner to Gates and Ballmer in revivifying Microsoft.

In the profile, Ozzie addresses the standard rap on Microsoft -- that it wants to re-create its Windows dominance in the cloud through the use of proprietary standards:

Eric Schmidt, CEO of that G-word company, says that because Microsoft has so much market share in servers and operating systems, the Redmondites will certainly be big players in cloud computing. He sees it as an extension of Microsoft's nasty behavior in the '90s. "Microsoft's basic strategy is to gain enough share in cloud computing to force other people to use its standards," he says. (By contrast, Google has blessed an open source version of its cloud technology, which both IBM and Yahoo have adopted.) Ozzie doesn't buy the charge. "Google and Microsoft have the same basic philosophy. We're basing our cloud on Windows technologies because they're great technologies and we have a lot of higher-level services on them. If you want to write open source stuff on them, you can do that."

One of Ozzie's major challenges to is create a more open and flexible Microsoft, a company that can compete on a more level playing field.

Mitch Kapor, the former head of Lotus Software, where Ozzie's team created Notes, sums up Ozzie's lifelong quest:

To Ozzie, software's soul does not lie in the accumulation of features. Instead, it lies in his dream of connectivity. "Live Mesh is very Ray," Mitch Kapor says. "It's the son of Groove, which is the son of Notes." Which was, of course, the son of Ozzie's beloved Plato. Thirty-three years later, Ozzie is still trying to build on what he saw in sophomore year. But it's no longer the Ray Ozzie vision. It's Microsoft's.

Eariler this month, I spoke with Brendan Eich, CTO of Mozilla and creator of JavaScript. We discussed the development process for the open-source Firefox browser, the status of Firefox mobile, and new competition.

Eich maintained that increasing competition from Google and Apple, as well as Microsoft, is good for developers and users. It also helps that the nonprofit Mozilla Foundation garnered $75 million in revenue, mostly from its search partnership with Google, which ironically just launched Chrome, a competitor to Firefox. With $33 million in expenses last year, it appears the Mozilla team is well funded to continue development at a rapid pace and attract top talent.

Regarding competition with Google's Chrome and other browsers, Eich said:

It's really a neck and neck race. There is a contest going on not only between Google and Mozilla but also Apple to have the fastest JavaScript engine, to have the best performance on various benchmarks. This is great. Competition is good for users and for Web developers. Another focus for us, especially for me is the Web developers...We are right in there, we are slugging it out. On the Google benchmarks their JavaScript engine is faster, on Apple's benchmarks we're faster than Google currently. It is going to vary, you are going to see it go back and forth, so it is only going to go up, which is the best thing for developers and that is what we are focused on.

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On this week's EIC Squared podcast, ZDNet's Larry Dignan and I talk about the tanking economy, the challenges facing an Obama administration CTO, and Microsoft's search quests with Verizon Wireless and Yahoo.

The holiday shopping season is looking grim as Circuit City files for bankruptcy and Best Buy lowers its forecast for its fiscal year. When will it ever end?

President-elect Obama has called for a national CTO. Given the complexity of technology infrastructure, the abundance of projects, the squeeze on budgets, and policy controversies, this will be an extremely challenging position.

We also discuss Microsoft's next moves to increase its share of the search market, with Verizon Wireless or Yahoo, or both.

SAN FRANCISCO--"We don't control the platform. It's magical when it belongs to all of us." Those were the words of Vic Gundotra, who spent 15 years at Microsoft and is now leading Google's application development efforts. He was speaking about the open Web, and Google's open sourcing of much of its code to the developer community at large at the Web 2.0 Summit on Friday.

David Treadwell, vice president of Live Platform Services, took issue with his former colleague's statement about Google not controlling the platform. "If you want to be open, where is the open search and ads?" he said. Gundotra responded that not all parts of the platform have to be open. "The Internet has places to build businesses," he countered. Gundotra closed with, "The big story over the last 10 years is Windows versus the Web, and the Web has won." Treadwell just smiled or grimaced and let it go as the panel came to an end.

It's clear that Google plans to use its free and open Web strategy to attack Microsoft, but based on the PDC announcements last month the Windows company has a lot of ammunition to fight back.

This week Microsoft gave evidence that it will continue to be a major force for at least the next decade. The company outlined its products and strategies that more fully embrace the "cloud," such as the Azure set of cloud services; Web-based, lighter-weight versions of Microsoft Office applications; and the latest iteration of the Live Mesh middleware. Google may have won the search war, but Microsoft isn't about to cede the global cloud to the search engine giant.

Ray Ozzie explains Azure to CNET News correspondent Ina Fried.

As in past epochs in its 33-year history, Microsoft ties its success to the developer community, having an army of loyal, or at least well or modestly compensated, software warriors. The Microsoft mantra is: "Build a platform and an ecosystem of developers, partners, fans, and people willing to spend their money will follow." A compelling platform and the potential to reach a large audience of buyers, which Microsoft can deliver, attract the developers, who build the applications and services that attract consumers and business users.

Microsoft also now understands that its platform must span every kind of device--PC, notebook, smartphone, car, home, etc.--and offline scenarios. Microsoft missed the Web search revolution, but it's not going to miss out on the much bigger revolution--the move to the cloud over the next two decades.

Google is building a competing ecosystem from the ground up with similar characteristics and a desire to attract millions of developers. Amazon is pushing its elastic computer cloud, and Rackspace, EMC, IBM, and many other companies are trying to get a piece of the action. Most the cloud companies are focused on hosting services, but the biggest piece will be platforms-as-a-service with developers creating and running their applications for on a cloud operating system.

An early example of this trend is Salesforce.com's proprietary Force.com platform. Sun Microsystems, the company that coined the phrase "The network is the computer," has all the pieces to construct a planetary cloud but seems to be missing from the discussion. As my friend Steve Gillmor notes, Sun is on the ropes.

Openness is a major issue as the global cloud materializes. Businesses don't want to be locked into a particular cloud, and also want various clouds and services to interoperate via standards. Speaking at the Professional Developers Conference last week, Microsoft's chief software architect Ray Ozzie said that the foundation level in the operating system cloud would run in Microsoft's data center, but SQL services, .NET, and Live services can be mixed and matched by developers inside and outside of the company's datacenters. The Azure cloud is also cross-platform, but the various clouds will extract a toll and by nature it won't be dead simple to move applications using foundation services from one cloud to another.

Microsoft's cloud computing efforts have gotten off to a slow start compared with competitors, and it's on the scale of a Manhattan Project for Windows. Azure is in pre-beta and who knows how it will turn out or whether consumers and companies will adopt it with enough volume to keep Microsoft's business model and market share intact. But there is no turning back and Microsoft has finally legitimized Office in the cloud.

Ray Ozzie has a track record of slowly but surely getting things done and Microsoft is famously persistent and cash rich. But building a platform, or Internet operating system, at planetary scale supporting billions of users and trillions of transactions per day, and having fleet Google as a primary competitor will be a major test of Microsoft's brain trust and resolve. Don't be surprised to find a recharged Bill Gates parachuting into the fray as Azure evolves and the cloud war for developers escalates.

See also:

Scoble: Never underestimate Microsoft's ability to turn a corner

Wilcox: How Can You Be So Sure about Azure?

In this week's EIC Squared podcast, ZDNet's Larry Dignan and I discuss the flailing economy. The CFOs explaining the financial results on tech company earnings calls echoed the sentiments and uncertainty of every other company and industry. As Microsoft CFO Chris Liddell stated:

We're not economic forecasters, and there is a high degree of uncertainty in outlook based on the state of the economy. As a result we've adjusted our guidance approach as follows. At the top end we're assuming a mild recession, and a relatively modest growth rate for all IT-based products. While at the bottom end we're assuming a deeper recession in the economy and end-season lower growth for IT.

Even Apple's Steve Jobs had something to say about the economy: "Your next-door neighbor can likely predict what is going to happen as accurately as we can."

We also preview what's coming next week at the Microsoft Professional Developers Conference in Los Angeles next week.

Guest post: Jean-Louis Gassée explains how Microsoft's future business model will borrow from both Apple and Google to compete with the free world of software. The essay was originally posted on Monday Note.

How do you compete with free? That's the question Steve Ballmer, Microsoft's CEO, is trying to answer every morning when he goes to work. On the server software side, Windows Server is doing well, especially with the Exchange e-mail server and the unheralded but very good collaboration server, SharePoint. These products have matured, they're relatively easy to set up and manage by IT organizations. The Exchange component is a spectacular success: it manages e-mail, contacts, calendars for hundreds of thousands of organizations all over the world. Even Apple finally embraced Exchange: the iPhone now syncs well with Microsoft's server and the next version of OS X promises "native" Exchange support. In plainer English: Apple's Mail, Address Book and iCal programs, for example, will sync with Exchange "out-of-the-box" just like the iPhone does. (This will be a relief to suffering Entourage users. Entourage is Microsoft's own Outlook sibling on the Mac, but it is a poor relative and lacks Windows' Outlook depth and polish.) Seeing that Windows Server generated more than $20 billion last year, one is tempted to think everything is going swimmingly.

Unix is the problem or, rather, the free Open Source implementations of its function set called Linux and FreeBSD, to name the best-known variants. While Windows Server and Exchange still reign for many Enterprise applications, tens of millions of Web sites run on Linux of FreeBSD software. Further, the Open Source nature of such software encourages sophisticated users to modify the operating system to fit their specific hardware configurations or applications requirements. For example, Google designs and manufactures (!) its own servers and customizes the Open Source OS they run. There's even a rumor they "roll their own" 10-gigabit Ethernet switches but I don't know vouch for that one. In any event, imagine how much the Google account would be worth to Microsoft if the Mountain View company used Windows Server? Knowledgeable readers will immediately object: Google running Windows Server isn't realistic. Not for price reasons but because Microsoft's server software isn't technically suitable for large "server farms" such as Google's. True. It'll be interesting to look at what Microsoft uses for its own Live cloud. In the past, Microsoft has had to resort to "other" server software for applications such as Hotmail. But, "scalability issues" (the ability to grow to serve very large server farms) aside, Microsoft is losing against free server software for the millions of simpler Web servers sprouting all over the world. And, as Linux and its cousins mature, they will inevitably make inroads in Enterprise applications where Microsoft still leads. Open Source competitors to Exchange do exist, they're not yet a strong threat but, if they keep improving, they will erode Microsoft very juicy server business.

On the desktop, Linux is trouble again, but much less so than in server farms. For consumers, as opposed to technically versed sysadmins, ease of use is still a strong plus for Windows. I bought two identical Asus EeePC netbooks, one running Windows, the other a Linux distribution. Windows is still much easier to use and update, Linux is still a little rough on normal humans. One example out of many glitches: the version I used didn't remember Wi-Fi access points and passwords. I had to re-enter everything each time I turned the machine on. This type of problem has prevented Linux from gaining much ground on the desktop.

But this could change: the success of netbooks, their large unit volumes could encourage a manufacturer such as Asus, Acer or Lenovo to invest in the needed polish to make a Linux-based netbook as easy to use as a PC or Mac -- or close enough at a much lower price. And the name, netbook, reminds us it might not need today's (or is it yesterday's?) full suite of robust desktop applications to succeed--it will run applications on/from the Cloud. Imagine a Google netbook.

Lastly, smartphones. Ballmer tries to change the subject by suggesting Apple ought to license its iPhone OS as opposed to keeping it all to itself. Let's skip over Microsoft's proprietary Xbox and Zune software and, perhaps, the upcoming Danger smartphone. Danger, the maker of the Sidekick PDA, is the company Microsoft bought earlier this year,. Microsoft has been selling Windows Mobile licenses for close to eight years now. In the licensing business, the iPhone isn't the real competition, Android is. How do you compete with a free smartphone OS, and a good one at that, which is supported by Google Cloud applications?

My guess is Steve Ballmer is working on a combined answer, one that is sketched before our very eyes already. Microsoft's Live services are but a rehearsal for a much bigger act, Microsoft's Cloud OS, sometimes called Strata. And, based on Microsoft's own Cloud services, we'll see a Danger-based smartphone, as proprietary as the Xbox and the iPod competitor Zune. Put another way, Microsoft's future business model will borrow from Apple and Google, it will have two components: proprietary devices and "universal" Cloud services. And like its models, it will attempt to extract extra profits by nicely tying both components together. For example: iPods are tied to the iTunes service, Android phones might (we don't know yet) better enjoy Google applications.

Interesting times ahead.

Jean-Louis Gassée is a general partner at Allegis Capital. Prior to his venture capital career he founded Be, Inc., which was sold to Palm in 2001. Gassée also held several positions at Apple Computer. He started Apple France in 1981, and in 1985 became president of the Apple Products Division. Earlier in his career Gassée as worked at Data General, Exxon Office Systems and Hewlett-Packard.

In this week's EIC Squared podcast, ZDNet's Larry Dignan and I talk about how the economic crisis will impact the tech sector. Both the House and Senate have passed the bailout package, but the legislation doesn't mean that tech or any other industry sector will reverse the downward spiral. Tech companies and financial analysts are rapidly cutting estimates to prepare for a potential nuclear winter in the global economy.

We also discuss Microsoft's forthcoming moves into cloud computing and the state of citizen journalism following the fake Steve Jobs heart attack story that showed up on CNN.

Microsoft is applying its tried and true formula of creating software platforms that can attract millions of users and developers to the hosted applications world. It will be the next major frontier for Microsoft to conquer, competing with companies such as Amazon.com, EMC, Google, IBM, and others. And it's safe to bet that Microsoft becomes one of the major players in the cloud. More to come at Microsoft's PDC event later this month.

CAMBRIDGE, Mass.--Microsoft Chief Research and Strategy Officer Craig Mundie on Thursday offered a long-term view of where Microsoft and the world of computing are heading over the next few decades. Speaking at the MIT Emerging Technology Conference here, Mundie envisioned a 3D virtual world populated by virtual presences, using a combination of client and cloud services.

He called this next generation "spatial computing" and listed numerous attributes: many-core processors; parallel programming; seamlessly connected and fully productive; context-aware and model-based; personalized, humanistic, and adaptive; 3D and immersive; and utilizing speech, vision and gestures.

Mundie gave a few examples from Microsoft Research to illustrate the concept of spatial computing. In a few months, the compay plans to test a new virtual reception assistant in some of its campus buildings. The assistant, which takes the form of an avatar, helps schedule shuttle reservations to get people to various locations across the 10-million-square-foot Redmond, Wash., campus.

The system includes array microphones and natural language processing by which the avatar listens to the subjects and then interacts with them in real time. The system has been programmed to differentiate people by their clothing. Someone in a suit, for instance, would more likely be a visitor and not a potential shuttle rider.

The prototype system is a resource hog, consuming 40 percent of its eight-core processor system even when idle. Eventually, Mundie said, such a system could be used for rural medical clinics.

"For a few thousand dollars you could put in an assistant who can guide robotic interaction," he said. "There is a wealth of opportunity for this, and it will allow people to develop applications and change the way the bulk of the population interacts with computers."

In another demo, Mundie offered a glimpse into the future of the live Web. He played out a scenario in which he was in an store, took a picture of a magazine cover on Northwest Indian art with his smartphone, and then placed the phone on a Microsoft Surface technology table when he got to his hotel. The pictures in the phone showed up on the surface table and he dragged them around. The system analyzed the image to determine how to use the photo as a way to pursue next steps in a virtual Web world. The system found the a digital version of the magazine and Mundie proceeded to explore magazine pages. From the magazine image of an art object, he went virtually to the store where the art object was on display.

The 3D store environment was stitched together with Photosynth technology and interactive. Mundie could "walk" through the store and have a text or voice conversation with a store representative or someone, such as his wife, via his buddy list. In addition, he could watch videos and examine 3D models of the art objects, spinning them around to look at all the different parts of a sculpture.

Then he showed how a smart handheld device could be used to navigate in a physical space. Pointing the device at a particular space would show local information, such as when buses were expected to arrive or what stores are having sales that would be of interest to the user based on their profile.

Mundie categorized this demo as an illustration of the power of the client and the cloud in spatial computing. "You have to have a to-and-fro between local and centralized data services," he said.

Programming tools, which have been a strength of Microsoft, will play a crucial role in the emergence of spatial computing. To create a kind of parallel universe--a cyberspace version of the physical world--everyone has to contribute on a continuous basis, Mundie said. Sensors and users will be generating trillions of bits of data, which requires addressing concurrency and complexity in a more loosely coupled, distributed and asynchronous environment, he said.

"Our tools are not designed to address this level of system design," Mundie explained. "We have to see a paradigm change in the way we write applications."

Mundie also said that software development hasn't graduated to become a formal engineering discipline. "The resilience of systems is not up to the task," he said. "We have to master the transition to a parallel programming environment, with highly distributed, concurrent systems. It's nascent at this point but it's required to achieve these capabilities."

In addition, creating a rich virtual environment that reflects the real world and is available to billions of people requires a lot of programmers. "If we want a million people to know how to do this, we have to mask complexity," Mundie said. His goal is to program computers to have the equivalent of human senses that can operate well together. "That's how we get to natural interfaces," he said.

Mundie's demos showed some progress in fulfilling Bill Gates' dream of natural interfaces and seamless computing. The challenge for Microsoft will be turning lab demos into real products and services that can scale. With the Internet as the platform, and not Windows, Microsoft will have many more competitors, and partners, in its quest to realize the vision of spatial computing.

See also: Mundie: The cloud needs killer apps