Part 2 of my interview of Michael van Dijken and John Zanni of Microsoft from Hostingcon 2008.

David: Yesterday at Serguei?s [CEO of Parallels] keynote, he mentioned that with Google looking into Web hosting that Microsoft might want to move into Web hosting. Do you believe that could be possible or would you rather be partnering with Web Host Companies?

Michael: I think there is room for both. If you look at our announcements this year, and not pure hosting Web sites, but hosting email, and Hosted Exchange and SharePoint we?ve launch an optical online services. Specifically Exchange online, SharePoint online and will have Office Communicator online in the not too distant future. If you look at what those products do, they meet a very broad set of needs; quite horizontal in nature. They have all the basic features that the average small business might need. What that offer does not do is meet certain industry vertical requirements like in the health care industry being HIPPA compliant or the financial services industry having Sarbanes-Oxley compliance or some of the archival rules that are required. The offer doesn?t support Blackberry today and there is certainly no customizational backend integration that?s possible with IT applications. That is a great deal of opportunity for our partners that do offer Hosted Exchange to target the higher end, higher margin business that doesn?t make sense for Microsoft to go after. So, if you think about our strategy it?s never just Microsoft or partners, it?s Microsoft with partners. And that will continue to be our strategy with any hosted services that we will launch in the future.

David: What would be your definition of cloud computing?

Michael: draws in breath and contemplates the full scope of the question. Um?

David: You can fudge it if you like.

Everyone laughs

Michael: That?s an incredibly broad question.

David: big smile. Yes it is.

Michael: I think it means a lot of different things to a lot of different people. So it depends on are you an ISV, are you a Hoster and are you an enterprise. I think at the broadest possible level its extending the notion of computing as we know it today to hosting in a massively scaled data center that is connected to the Internet in some way that you don?t initially know where that happens to be. But I think what is more important is really what services become available with cloud computing? How do you enable developers and ISVs to be more productive writing applications that sit in the Cloud as opposed to an enterprise computing environment or in a package software type scenario? One of the oldest tricks in the book, if you are a developer and reuse someone else?s code and tweak it or take a bit of code that works and include that with your writing and leverage that; how can that be translated to a cloud computing service? Can we create these building block services or infrastructure services that can be re-used to maximize developers? productivity or ISV?s productivity so they can write applications to the Cloud. And how can we do that so that it scales and how can we do that such that it doesn?t really matter if the ISV is writing against their own data center or writing against the services that?s hidden within the Cloud somewhere maybe run by Microsoft, maybe run by one of our partners. So the definition of Cloud Computing is on a fundamental level is moving an enterprise platform or a developer platform into the Cloud, hosted on the Internet somewhere. I think what makes it interesting is the services that can be provided around that for Hosters to leverage, for ISV?s and developers to maximize their productivity.

David: What would you say the most exciting technology in the Hosting Industry today?

Michael: Most exciting technology in the Hosting Industry?So, I think the technology that is enabling a lot of change.? Well I mean exciting its got to be some of the user experience software. So, I would say some of the things we are doing with SilverLight or enabling with SilverLight from a video streaming perspective or just from a user-experience perspective is just changing the way people interact and use web clients, if you would. You know, that the bright shiny object.

Everyone laughs.

Michael: They see it, it?s cool and they want to play with it. Right?

But in terms of what is fundamentally changing I think the dynamics in the Hosting Industry, enabling some of those changes for say cloud computing is virtualization. And virtualization has been around in the enterprise for some time, but virtualization in the hosting space is really new, if you get passed VPS type offers that you see quite a lot of. Virtualization can enable group computing or a cloud computing scenario in a very secure and scaleable way. While I think we have a ways to go to really implement that, it makes that opportunity a reality.

John: If I were to call one product it would be Windows Server 2008, because of the Hyper-V, it has the virtualization technology which allows you to run multi-platforms, OS?, and manage them. With the work we?ve done with our internet server IIS 7.0, it allows you to run both PHP and ASP.Net applications on the same server. So, it allows you to really have a common platform. It?s designed to be verticalized for some specific work loads very easily. It is the most flexible product out there for a Hoster to really take, to really do what they want with it. And do it in a way that they can keep their costs of operations very low and meet the more complex demands of their developers and customers.

Next time we will wrap up the Interview with the difference between Google and Microsoft, Michael and John?s view of change in the Host industry, and where does the majority of Microsoft?s income come from.