Microsoft: Moving more assets to the cloud may curb piracy

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.

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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

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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41 comments
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  • Curb uptake too

    I don't want my assets in a 3rd party cloud. Period.
    happyharry_z
    • RE: Microsoft: Moving more assets to the cloud may curb piracy

      @happyharry_z : Okey. And what business-wise rational did you use? Or was it just a gut feeling you got.

      That figures why don't hear any CTO/CIO called Happy Harry on any Fortune 500 company or even Fortune 5k or 5M...
      cosuna
      • RE: Microsoft: Moving more assets to the cloud may curb piracy

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        gorians
    • RE: Microsoft: Moving more assets to the cloud may curb piracy

      @happyharry_z

      So all the tech you used to even post a message including your Internet connection was something you created on your own?

      -M
      betelgeuse68
      • RE: Microsoft: Moving more assets to the cloud may curb piracy

        @betelgeuse68 wtf kinda dumbass comment is that? He doesn't want his documents worked on or stored on a remote server. Its not hard to understand. Businesswise it might be a tough sell. Companies have even more need to manage their own things

        this won't stop piracy or at least wont increase revenue. Pirates only pirate because they do. Make it impossible and they will move to the many free alternatives. Money won't magically appear from pirates
        semitope
  • RE: Microsoft: Moving more assets to the cloud may curb piracy

    The economics of cloud totally makes business sense for Microsoft. My problem is when they intertwined just for the sake pushing their cloud agenda. Take Windows Phone 7, missing so many things because in their opinion everything should work against the cloud. Forget the realities of today. I am just wondering if future server OS releases will start to pull features for the sake of the cloud. And don't get me started thinking about privacy or as we have seen recently with WikiLeaks how uncertain running in the cloud can be when someone does like what you are selling.

    For my part, Azure is exciting and I see so much potential. Other times it feels like innovation be damned let's create a complete lock-in strategy to protect our Windows.
    windowseat
    • And there's the problem

      The cloud, like desktops before it, will be the race to the bottom. Pricing will become the only competitive advantage.

      How's MS going to maintain margins in such an environment? Gone are licenses and CALs. Who's going to pay the equivalent when cheaper alternative are available?

      MS continues to run around in circles, trying to find relevance beyond it's desktop monopoly.
      Richard Flude
  • RE: Microsoft: Moving more assets to the cloud may curb piracy

    The antipiracy angle is something video game developers have worked on for some time. Unlike pirated movies or music, software requires executable files which can be served remotely without users being able to copy/capture them.
    Jgarrettca1
    • for now... NT

      @Jgarrettca1 NT*
      OneTwoc21
    • RE: Microsoft: Moving more assets to the cloud may curb piracy

      @Jgarrettca1
      And I would never buy a game that required I be connected to their servers.

      Optional to play multi? sure.

      But will not own a game that will be held hostage to:
      A. Internet connection
      B. Company Solvency (Server no longer supported)
      C. Server issues
      Bodazapha
      • RE: Microsoft: Moving more assets to the cloud may curb piracy

        @Bodazapha I used to strongly feel the same way, but I think that ship has sailed. Everything else in the world is becoming internet-dependent, so games aren't going to be the sole hold-out. There is an up-side... more money gets poured back into new development, with dramatic results. Old timers like me will still be able to play Atari off-line when the urge strikes (but not Counter-Strikes).
        scH4MMER
  • RE: Microsoft: Moving more assets to the cloud may curb piracy

    MSft and the rest,want us to have pay-per-view,
    or monthly subscription OS.
    Click on desktop icon to go to the cloud.
    You pay subscription,or you get nothing.
    That is the bottom line,nothing else!
    knash1
    • RE: Microsoft: Moving more assets to the cloud may curb piracy

      @knash1

      Yep, that is the bottom line in this case, and NO ONE (save perhaps businesses) want that!
      Lerianis10
    • Yes, that is their utopia,.....

      @knash1

      which is why we need net neutrality and open source.
      Economister
    • QOS will kill microsoft. Since they don't know how to spell quality

      @knash1 ...quality has always been a aspect 100% absent from microsofts products.

      Make them guarantee service and they will go out of business, they are completely incapable of providing good service at any level.
      Reality Bites
  • RE: Microsoft: Moving more assets to the cloud may curb piracy

    It starts like this:
    Windows XC --Windows 10Cloud
    We will need a credit card.
    Windows XC (nearly get your XP back) $20.00 per mo.
    MSOffice $10.00 per mo.,etc.
    knash1
    • RE: Microsoft: Moving more assets to the cloud may curb piracy

      @knash1 : Almost nailed it.

      In my take, maybe in 2014, Microsoft will figure that only 20 or so percent of businesses moved to Windows 7 or 8, most others ditching Windows for iPads slates, so they will basically re release Windows XP with IE6 *AND* IE11 (based on HTML6) in something new called Windows Cloud Client or Windows Client 2014 or Windows Client 365.

      They will have learnt the hard way that they had the monopoly just on client based executables and that venturing into the cloud was not the correct move to make on 2011.
      cosuna
      • RE: Microsoft: Moving more assets to the cloud may curb piracy

        @cosuna Hm...<br>Almost 20% of business are already on Windows 7...<br>iPad slates? With what keyboard? What platform extensibility?<br>I think Microsoft already has the most paying customers for cloud, has one of the most used cloud services (hotmail), has one of the most visited web properties (MSN), and is doing quite well in the living room (xbox). <br><br>Your rational makes no sense.
        jessiethe3rd
      • The sooner the morons move to the cloud the sooner we can dump them.

        @cosuna .. MS has no customer loyalty, save the few addled lemmings unable to manage an alternative.
        Reality Bites
      • RE: Microsoft: Moving more assets to the cloud may curb piracy

        @cosuna : no where near<br><br>I'm writing this on an iPad! And it's great, but it's not a substitute for a proper computer inside or outside a business environment - and it's far too expensive!<br><br>As for only 20% moving to 7 or 8 I'm going to say you're wrong for 2 reasons. Firstly because if Microsoft isn't selling XP then you won't have much choice, and second because windows 7 is much better than XP in almost every way I can think off. Also if you've not downloaded the beta of IE 9 then I can tel you that that's good too.<br><br>Windows 7 and IE9 are a return to form after Vista and IE 7 & 8 which refocuses on speed, ease of use, and quality... Which is what businesses like.
        Big_Belly_Bob