Microsoft: Moving more assets to the cloud may curb piracy

Summary:It's always telling to hear what Charles Songhurst, Micrsosoft's General Manager of Corporate Strategy, is focused on. These days, Songhurst is spending most of his time on two areas -- the economics of the cloud and piracy.

It's always telling to hear what Charles Songhurst, Micrsosoft's General Manager of Corporate Strategy, is focused on. Songhurst, an eight-year Microsoft veteran, has held various strategy and mergers and acquisitions posts at Microsoft. According to his bio, Songhurst was instrumental in helping to kill the acquisition of Yahoo, saving the company $48 billion, and subsequently negotiating the Microsoft-Yahoo search partnership.

These days, Songhurst is spending most of his time on two areas -- the economics of the cloud and piracy -- he told attendees of the NASDAQ OMX Investor Program on December 7. (I listened to the Webcast.)

Microsoft recently issued a white paper entitled "The Economics of the Cloud," which Microsoft envisioned as "help(ing) build a framework that allows IT leaders to plan for the cloud transition. (My ZDNet colleague Larry Dignan wrote about Microsoft cloud economics paper last month.) Among the takeaways: Larger clouds save users more money than smaller clouds.

Songhurst talked up the economies of scale that can be realized via day-parting to drive up server utilization and other ways of taking advantage of both supply-side and demand-side factors. He noted (not surprisingly) that second-tier, non-mission-critical apps are what's going to the cloud first. And he claimed that Microsoft wouldn't cannibalize its business by moving more and more to the cloud because moving enterprise IT does not "somehow turn (things) into a simple, homogeneous mass."

The one new tidbit Songhurst shared was a connection I hadn't made before. He said that Microsoft is counting on the movement of more of its assets to the cloud as helping to reduce piracy. The company loses a significant share of potential revenues to pirates and has been trying a variety of ways to reduce it, from better holograms on boxes, to more lawsuits against alleged pirates, to more stringent "Genuine" software checks.

"As products become services, piracy naturally disappears," Songhurst said. "It is hard to pirate when the experience is coming from a server."

Songhurst said piracy reduction due to the cloud was a long-term phenomenon, which might not have much impact until the next decade, but that it was "a very positive trend."

One other question from an attendee of the NASDAQ event which I thought was interesting was how Microsoft could be both a good consumer and good enterprise company. Songhurst acknowledged that it was very hard to do both well, but the "rewards" of managing to were "very high." Like CEO Steve Ballmer has said recently, Songhurst claimed that the synergies between the two parts of the business are tightly intertwined and interdependent. He didn't say much else on the topic.

Songhurst also declined to answer a quesetion about when and if Microsoft would port Windows to ARM, noting "we don't talk about anything about Windows beyond official announcements." He also deflected questions about what's coming next on the Office front and how/when Kinect-like capabilities might come to PCs. Still, I found it interesting just how much attention (and at what levels) the company is paying to the economics around the cloud these days....

Topics: Enterprise Software, Cloud, Microsoft, Piracy, Security

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Mary Jo Foley has covered the tech industry for 30 years for a variety of publications, including ZDNet, eWeek and Baseline. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008). She also is the cohost of the "Windows Weekly" podcast on the TWiT network. Got a tip? Se... Full Bio

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