Proprietary Software Does Not Scale
It used to be said that open source software does not scale - a reflection of both its immaturity at the time, and of the pious hopes of the proprietary world. Today, the reverse is true: it is proprietary software that does not scale, but in a slightly different sense.
This was brought home to me by IBM's fashionable Blue Cloud announcement:
Blue Cloud – based on IBM’s Almaden Research Center cloud infrastructure -- will include Xen and PowerVM virtualized Linux operating system images and Hadoop parallel workload scheduling. Blue Cloud is supported by IBM Tivoli software that manages servers to ensure optimal performance based on demand. This includes software that is capable of instantly provisioning resources across multiple servers to provide users with a seamless experience that speeds performance and ensures reliability even under the most demanding situations. Tivoli monitoring checks the health of the provisioned servers and makes sure they meet service level agreements.
The whole point about cloud computing is that it has to be effectively infinite - the more people want, the more they get. You can't do that with software that requires some kind of licensing payment, unless it's flat-fee. You either have to write the software yourself, or - much easier - you use free software (or, as with Google and now IBM, you do both.)
If cloud computing takes off, Microsoft is going to be faced with a difficult choice: see everyone migrate to open source, or offer its operating systems for a flat fee. Given its recent behaviour in places like China and Russia, where it has effectively given away its software just to stop open source, I think it will opt for the latter.