Microsoft announced Windows Azure, a version of Windows

Microsoft announced on Monday a version of Windows that runs through the Internet from within Microsoft's own data centers.

Dubbed Blue Windows, is less a replacement for the operating system that runs on the PC itself what is an alternative for developers to write programs that allow living within Microsoft data centers rather than in servers of a particular company.


"It is a transformation of our software and a transformation of our strategy," said Ray Ozzie, a pioneer in the computer industry that now serves as the chief architect of Microsoft software. (For a play-by-play account of the speech by Ozzie, see "PDC 2008: Windows Azul live blog.")

Microsoft first outlined a change to "Live Services" at an event in San Francisco in 2005. The company has released a few little things, such as live mesh, but the announcement Monday marked the first real debate on how the Microsoft Internet disparate strategies among themselves.

The announcements come at the start of the Microsoft Professional Developers Conference here. On Tuesday, Microsoft plans to enter into more details about Windows 7, the successor to Windows Vista, due out by around January 2010.

With the launch of Blue, Microsoft will be in competition with other providers of Internet storage and computer services including Amazon, Salesforce.com, and Rackspace.

Ozzie said he was tipping his cap to Amazon founder Jeff Bezos to innovate the model of the host computer. Amazon "established a base level of standard design, architecture models, and business models that we are going to learn from everyone," he said.

Microsoft Windows is doing Azul in the form of preview to developers, with a limited subset of the features that are planned in the final product before its release.

There were not many details about how Microsoft will charge for Blue, saying it will be free during the preliminary hearing. Final pricing, Ozzie said, "will be competitive with the market."

The company plans to offer businesses the option of running through the types of Internet software that traditionally run on a business' own servers. Microsoft already sells its Exchange corporate e-mail software in this manner, but that is only the beginning, says Microsoft Vice President Dave Thompson.

"All our software companies will be delivered as an online service as an option," said Thompson.