LOS ANGELES: The globe's largest software company on Monday removed the wraps from a web-based operating system branded Windows Azure, of which Collins Stewart analyst Sandeep Aggarwal opined: "The significance is immense."

A view that suggests he is more attuned to share price fluctuations than corporate IT practicalities.

The launch of an beta version of Azure, described by Microsoft's chief software architect Ray Ozzie as "Windows in the cloud", is an attempt to play catch-up with similar offerings already on the market from Google and Amazon.

 "It's a transformation of our strategy," Ozzie told the Professional Developer's Conference, an annual gathering of third-party software-engineers at which Microsoft's future plans are outlined.

According to Aggarwal, the new revenues the software titan will make from Azure will be complementary to its traditional software licensing business, rather than replacing it. 

He also warned that the experience of other companies attempting similar software subscription businesses showed that "margins are very low and it takes years and years to show profitability".

Meantime, the developers heard from Ozzie that support for web-based computing via Azure will operate in similar fashion to other versions of Windows intended for computing on PCs, servers and mobile handsets.

This support would enable software developers to create applications leveraging the new web-based computing power, while the technology will also underpin Microsoft's own online consumer and business services.

“We ourselves are betting on our own platform with our own apps,” Ozzie said. 

But some IT experts doubt that large corporations will be at ease with the concept of cloud computing. They cite concerns about security, vulnerability to hacker or terrorist attack and downtime.

Although Azure appears to offer clear advantages,  for example to firms with large, multinational sales and service team – access to company data wherever in the world they might be – the corporate IT view is that initial uptake is more likely to come from smaller businesses.

Data sourced from Financial Times; additional content by WARC staff