Quite a few interesting things happening even outside the gymnastics going on in the markets these days, but most of them I won't get to until sometime tomorrow. I did want to highlight Amazon's announcement today, and CTO Werner Vogels' accompanying blog entry, that the company will be offering a Windows platform on the Elastic Computing Cloud (EC2) service some time before the end of the year. There had been some rumors of this previously, as the program is currently in a closed beta; the announcement today is widely seen as a pre-emptive response to Microsoft's announcement (also not a huge surprise) that it would be offering its own cloud OS service. But I'd rather look at the Amazon offering first (I'll get to Microsoft tomorrow).

Making a Windows component available in EC2 was an obvious next move for Amazon; they already support Linux and several heavy-duty applications that run on that platform. Assuming the general model is good, they're well positioned to pick up customers looking for an easy transition from internal to cloud-based provisioning. What's left? The vast panoply of Windows-based applications running in the enterprise today.

The catch, as astute observers are already noting on Vogels' blog, is that Microsoft controls Windows licensing... and despite some recent relaxations in that licensing specifically to accomodate virtualized instances (in fact, it's hard to imagine this service would even have been remotely possible without those changes), it's not exactly friendly to the on-the-fly, on-demand model that EC2 best caters to. There is no mention of how Amazon plans to accomodate this issue other than mention that, of course, pricing for Windows-based EC2 service will be higher than that for Linux because of the licensing costs. But it seems that Microsoft might not make it so easy as just paying a little extra, depending on exactly how the service is structured and how instances are allocated and tracked. While the press treatment of the new licensing terms has been liberally interpreted, I have yet to see a Microsoft EULA that can't ultimately be twisted by the company's lawyers into meaning just about whatever they want it to mean. The new terms were intended to ease internal virtualization efforts for enterprise users; just as you couldn't offer hosted Exchange service without hosting-based licensing terms, it's unclear that you could offer hosted Windows services without some other sort of specific arrangement. This is substantially different from hosting websites on a physical Windows box. It remains to be seen what Amazon's approach will be in dealing with this, and what Microsoft's response will be as it threatens their own service.