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Microsoft's BPOS triumphs: Are they really cloud?

Microsoft has been bragging about its big online apps contracts with New York City and the State of California. But the question remains: are the deals really cloud computing?

Weekly cloud computing update

Last week, Microsoft crowed over major new wins for its Business Productivity Online Services (BPOS) and the launch of the unfortunately named Office 365 product line (it's the same brand as the generic store goods at Whole Foods. I can never again look at Office without thinking of canned, slightly expensive peas).

In New York City, Steve Ballmer got on stage to celebrate the restructuring of Microsoft's licensing agreements with the city. NYC has created a new charter for the Department of Information Technology and Telecommunications (DoITT -- get it? "Do It") to centralize and deliver all the city's IT as a "shared service."

And in California, 200,000 users could potentially go online to BPOS; state agencies will have to begin the process of selecting from available email system migration options in short order, and the move is expected to be well under way by next year. It's being touted as a way to shed legacy systems and operating costs in one fell swoop.

But what if Microsoft isn't actually moving all that many users to the cloud after all? A source close to both deals says that Microsoft is playing fast and loose with its licensing to make the big government wins look more cloudy than they really are.

Something other than cloud
For instance, California state agencies will be allowed to pick the best fit from a menu of services and solutions based on BPOS (which is based on Exchange); one of those options in the deal is an on-premise, regular old Exchange installation, about as far from cloud services as you can get. How many agencies will pick that over true cloud services with BPOS?

Bill Maile, spokesman for the CIO's office for the State of California said in an email that diversity of choice was necessary. "The benefits of giving agencies a choice for their email is primarily based around the diverse business needs of state agencies," Maile said. "There may be some specific business need that the hosted service cannot meet because the nature of a hosted environment."

The New York City deal, as well, looks like business as usual: a purchasing agreement with "a handful of basic BPOS licenses thrown in," according to our anonymous source.

In addition, Microsoft most likely took a bath on the deal -- if NYC is saving $50 million in costs, its coming out of vendors' pockets -- and the DoITT charter actually has no mandate for cloud. It instead reads, "DoITT shall consolidate IT infrastructure and related operations and services to provide a citywide shared services IT department." That can cover an awful lot of ground, ground that doesn't necessarily need to include cloud computing.

The truth is somewhere in the middle, of course. Some of California's state workers will indeed be using BPOS, and it makes no sense at all to perform data center consolidation, which NYC is doing, without using some flavor of newer cloud services technologies. However, this looks like it might be far more of a rearguard action by Microsoft than the company wants anyone to think.

Carl Brooks is the Technology Writer at Contact him at

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