Is Microsoft Blowing Smoke When It Says It Won't Be Hurt By the Cloud?

The new president of Microsoft's server and tools business Satya Nadella recently claimed that cloud computing represents a big opportunity for Microsoft rather than a threat. Is that just empty bravado, or does Nadella have a clear picture of the future?

In a discussion with Eric Savitz of Forbes at the GigaOM Structure Conference Nadella said that Microsoft's sweet spot has always been "low price and high volume." He added, according to Computerworld, "We're not the ones with high license fees. I look at this as structurally a very beneficial thing for us. But, sure, we have to innovate."

So far, though, Microsoft has certainly not been helped by cloud computing. For now the cloud remains more of a threat than an opportunity for the company, because its cloud offering has fallen short, and Microsoft hasn't embraced the cloud wholeheartedly. Computerworld notes:

Windows Azure, Microsoft's platform-as-a-service cloud, opened for business more than a year ago but hasn't gained the adoption seen by Amazon's infrastructure-as-a-service offering or Salesforce's PaaS cloud.

As for the cloud version of Office, Office Web Apps, they're generally underpowered and not as fully featured as their main competitors, Google Docs and Google Apps.

Microsoft's cloud-based offering for small and medium-sized businesses, Office 365, is about to come out of beta. Microsoft has done a solid job with it, but overall, there's something of a half-baked feel to the suite. Rather than being a cohesive, integrated offering, it's a series of services bolted to one another, not always seamlessly.

As long as Microsoft takes a halfhearted approach to the cloud --- keeping cloud-based versions of Office underpowered, for example --- the cloud may hurt it. The cloud will only become an opportunity for Microsoft when the company fully embraces it.