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Quick Hits: Microsoft's Partly "Cloudy" Forecast


Brief scrutiny of today's headlines.


On Monday, Microsoft (MSFT) announced it would be making a foray into "cloud computing" with a new online platform called Windows Azure.

The platform will allow developers to create applications that can then be stored and operated from within the "cloud" (remote, Web-based services that can be accessed from more than one computer). Azure will act as the operating system, which Microsoft will host. For developers who wish to write software in a centralized online location rather than individual business servers, it's a welcome change.

The question is: Will it be profitable for Microsoft? Bob Muglia, the company's executive in charge of its server business, believes so. "We will wind up having a business model that we think will be profitable," he said. But until Microsoft can start charging customers for the service, he concedes, Windows Azure will remain in "investment mode."

Although Microsoft dipping its toe into Web-based applications will bring the company back into the 21st century, it still faces an uphill battle from competition. For years, Google (GOOG) has been luring customers away from offline computing with its wide array of online services. Many users abandoned Microsoft's Outlook for Gmail and fled Microsoft Office for Google Docs. It's behind the curve and has a lot of catching up to do.

The company has yet to put a release date or dollar amount on Windows Azure. For businesses that can't wait, there's always Google Apps.

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