In 5 years, will Microsoft be relevant in the cloud?

As reported by Network World‘s John Cox and Jon Brodkin, at Microsoft’s annual TechEd conference this week in New Orleans, “industry watchers are looking for Microsoft to sustain the buzz around Windows Phone 7, as well as share details about its cloud computing strategy in general and Azure cloud services in particular.” Also, Microsoft is opening a cloud computing center in Taiwan: “Microsoft will also work with two Taiwanese companies to develop a new generation of servers designed for cloud computing.”

Or, as Microsoft CEO Steve Ballmer put it when talking about cloud computing: “We’re all in.” Considering all of Microsoft’s recent cloud activity, that is clearly the case. But is it enough to capture the huge cloud computing wave?

The trouble is that Microsoft has always been a follower when it comes new, emerging, and hype-driven technology, then typically leaped into first place by leveraging its dominance on the desktop and penetration of the Global 2000 businesses. That was clearly the case when the Web took off in the early 1990s; Microsoft turned the ship and captured most of the browser and server software market.

But today is a different story. With Apple, Amazon.com, and Google out there with well-funded and innovative solutions, Microsoft is finding its dominance on the desktop may not be enough to launch it into a cloud computing leadership position unless drastic measures are taken.

I’ve defended Microsoft in the past and its ability to capture the emerging cloud computing productivity application space, and I still believe Google won’t be able to displace Microsoft from that market, at least for now. The larger question is in five years, will Microsoft be in the top five cloud computing companies? I’m not sure it will, given its current trajectory.

Consider the recent Microsoft cloud announcements. Who believes that Windows Phone 7 will give both iPhone and Android a run for their money? I suspect it will be a good phone OS, but about five years too late. The same may be said about Azure, which was really an early product if you consider when Microsoft started working on it. However, it’s going to be tough to drive Azure into a market dominated by Google and Amazon.com, not to mention hundreds of well-funded, aggressive, and innovative startups that are seeing gold in them there clouds. The current Microsoft Azure fan boys and girls aren’t enough to carry the .Net religion into the cloud.

So what can Microsoft do?

First, focus on the replication of the desktop on the cloud, including creating a killer version of Office in the cloud, as planned. Most people using the cloud will look to Microsoft and Google to fill that gap, and Microsoft has the advantage of having been in that space much longer with a much larger user base. Microsoft: You should acquire some of the more innovative cloud startups out there to round out your cloud-based productivity apps, which will mean paying 30 to 50 times their revenue.

Second, get new talent in the shop to focus on more innovative ways to capitalize on cloud computing. Oh yeah, and give that new blood some actual power to get things done. If you’ve heard about an idea, it’s already too late to pursue it. You’re not likely to have much success in following trends — you need to start creating them again.

Finally, while the cloud computing space seems like a sprint, it’s actually more of a marathon. The companies that focus on providing innovative, valuable, and reliable services will win the game at the end of the day. Try to be that kind of company.

This article, “In 5 years, will Microsoft be relevant in the cloud?,” originally appeared at InfoWorld.com. Read more of David Linthicum’s Cloud Computing blog and follow the latest developments in cloud computing at InfoWorld.com.