Is Microsoft such a big innovator when it comes to Microsoft Azure?

Quick- when was the last time Microsoft dazzled you with breakthrough thinking and agenda-setting innovation? What was the last Microsoft product you couldn't wait to get your hands on, that would make a huge impact on your enterprise?

One former executive, writing in The New York Times, called the company "a clumsy, uncompetitive innovator" because, he argued, entrenched Microsoft product teams regularly undermine up-and-coming ones. My colleague Bob Evans worries that Microsoft is "drifting toward fat and complacent, prone to bold talk but tepid action." The message boards are teaming with unfavorable comparisons to Apple, Google, Amazon, and other competitors that are rattling the high-tech rafters with their exciting products and novel delivery models.

Take the Microsoft Azure Services Platform. Released in February, this cloud-based application development environment isn't just something Microsoft plucked out of the vapor. The company has been working on it for more than four years, with the goal of providing developers on-demand compute, storage, and networking to host, scale, and manage apps in Microsoft data centers via the Web. Windows Azure is mainly for .Net apps, but it also supports PHP, Java, Ruby, and Python. Later this year, Active Directory will be able to issue a federated identity to authenticate users of Microsoft Azure services.

"Interest is off the charts" was the predictable assessment of Bob Muglia, president of Microsoft's Server and Tools business, though he and other company execs note that mainstream adoption of Azure is still years away and that Microsoft is now absorbing prodigious customer feedback to iterate the platform. As for everyday apps such as Exchange, SharePoint, and Dynamics CRM, Microsoft sees half of its revenue from those products coming from cloud-based versions within four years. "We need to be (and are) willing to change our business models to take advantage of the cloud," Ballmer, the self-described "old PC salesman," wrote in his March memo to employees. Compare those words and deeds to the equivocation about software as a service from SAP and Oracle, and then tell me who the laggards are.

Granted, Microsoft Azure and Exchange Online aren't quite the stuff of iPad buzz, but big enterprise IT platforms and decisions don't work that way. It's the reason Steve Jobs couldn't care less about selling to enterprises, where architecture and standards and manageability and compliance and ROI trump gotta-have-it impulse. CIOs don't line up to get their hands on the latest innovations, cloud or otherwise; they step back and evaluate them, as they're starting to do with Azure and, with more immediacy, Microsoft's SaaS products.

Never before has a company so big (close to $60 billion in revenue) and so astoundingly rich (operating profit of more than $20 billion and cash and cash equivalents of more than $30 billion) been taken so lightly by so many. Make no mistake: Microsoft won't dominate the cloud - no company will ... it's just too big a place - but it will be the preeminent, most profitable player there in no time.

Microsoft, always the butt of criticism because of its enormous size and influence, is taking more jabs than usual about its perceived inability to innovate

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