With the formal announcement of Windows Azure yesterday, Microsoft took another step on the path to transforming itself from client/server organisation to web-based services provider. Azure, to be released with a subset of features for the developer community with immediate effect, is essentially Microsoft's attempt to provide a way for developers to write programs that will run in Microsoft (and eventually third-party) datacentres, and is an effort to improve on fledgling cloud computing infrastructure efforts such as Amazon.com's Elastic Compute Cloud (EC2).

While old-guard Microsoft executives such as Bill Gates and Steve Ballmer seem to have been more guarded, the cheerleader for this new approach is Ray Ozzie, Microsoft's chief software architect. In a press release, Ozzie said:

"Today marks a turning point for Microsoft and the development community. We have introduced a game-changing set of technologies that will bring new opportunities to Web developers and business developers alike. The Azure Services Platform, built from the ground up to be consistent with Microsoft's commitment to openness and interoperability, promises to transform the way businesses operate and how consumers access their information and experience the web. Most important, it gives our customers the power of choice to deploy applications in cloud-based Internet services or through on-premises servers, or to combine them in any way that makes the most sense for the needs of their business."

Pundits will doubtless note that - despite the Windows branding -- this is less a traditional operating system then a collection of interfaces and services, and add that significant revenues will probably be years away, the very fact that Microsoft is entering the sector will give cloud computing a big credibility boost.

Microsoft could have stuck to its message that 'local compute resources = good, web resources = bad' for a while yet but Windows Azure is an acknowledgement that both business and consumer computing models may well change forever over the next several years. If they do, Microsoft has to have a way to roll over at least a hefty chunk of its multibillion-pound applications and operating system business.