I've mentioned a few times in this blog that I believe Microsoft and Google are not truly in competition with one another, but instead that they represent two entirely different philosophies of computer use which are in competition with one another. On the Google side is the concept of cloud computing; the idea that the Internet and modern communication tools make the geographic location of the processors executing program code largely irrelevant, and that economies of scale will make it cheaper and more effective to centrally locate those physical resources and sell the service, rather than the software. On the Microsoft side is the more traditional desktop and client/server model; the idea that some services are best executed centrally, as above, but that others are better executed on a powerful local computer which need not interact with anything across the network in order to function properly.

There is an increasing amount of blur between these positions, however. Google, with tools such as Gears, is beginning to make certain of its tools executable off-line, while Microsoft, with WGA and other anti-piracy and "expanded features" toolsets, is increasingly requiring that you have an Internet connection constantly available to use their software. This, I suppose, was the first clue in the progression that Phil Wainewright has been tracing in Microsoft's apparent behind-the-scenes collapse in their stance and gradual adoption of the cloud computing philosophy.

I am not as prepared as Phil to count Microsoft out just yet; in fact, I think that this transition, if it is in fact what is happening, may well signal their continued dominance. I continue to believe that their Software+Services response to the SaaS cloud is a great short-term approach for not only Microsoft but many of their clients; it represents the reality of their capabilities and situations right now. In the long term, however, it's too tied to the traditional desktop based model to be a winner and the company would have ridden it into the grave. If they have, however, recognized this limitation and begun to transition the company to become a cloud-based provider, then they have every opportunity (and all the resources) to dominate that aspect of computing as well as they have done the client/server model for the past two decades.