Is the future of computing in the clouds? Ray Ozzie, who took on the mantle as Microsoft’s Chief Software Architect when Bill Gates retired, thinks that the answer may be “yes” — at least on the back end.

In his keynote speech on Monday at Microsoft’s Professional Developers Conference, Ozzie announced Windows Azure, a new cloud computing operating system (OS). The platform is a key component of Microsoft’s strategy, presumably one that Ozzie has been working on since 2005, when he talked about the future of Windows Live services.

Microsoft’s Professional Developers Conference has been around since 1992, when, according to Wikipedia, the Win32 API was first demonstrated and “Chicago,” the codename for Windows 95, was first mentioned.

For the rest of the 1990s, if you wanted to know what new technology Microsoft would be introducing, there was no better place to be. IT industry veterans refer to it simply as “PDC,” an acronym you’ll see frequently in online shorthand. (Note: You can track hashtags for this year’s conference on Twitter under PDC08 or PDC2008, though just PDC produces plenty of hits as well.)

Now, in the late “oughts,” there are of course many other IT conferences that address technologies important to IT professionals and consumers alike. Even so, Microsoft still uses the platform afforded by PDC to introduce initiatives that will be of great interest to the Windows development community. This year was no different.

With this announcement, Redmond-based software giant now appears to be embracing the platform as a service (PaaS) paradigm similar to that deployed by Google and Amazon. While on one level, this is similar to the software as a service (SaaS) distribution model in which applications are hosted by a vendor or service provider and made available to customers over the Internet, Microsoft vision is even more ambitious.

In Ozzie’s view, Azure is a massive, highly scalable service platform that will allow both individuals and corporate customers to build applications in the cloud. In fact, it’s an entire new tier of computing. If the PC was the first tier and the enterprise the second, the Web-facing tier is the third, made up of Internet-facing systems for computation, storage, networking, application hosting, etc. In other words, the sorts of things that Amazon offers through its Amazon Elastic Compute Cloud (Amazon EC2) and Amazon Simple Storage Service (Amazon S3).

If you develop an application and need to scale it from 10,000 users to 10 million — quickly — these platforms can help.

Ozzie differentiated Azure from other PaaS precisely through its integration with the Windows ecosystem. Azure builds further upon the programming support for the Web services introduced by .NET and the synchronization of data extended to consumers through Live Mesh.

Microsoft hopes to attract developers with support for popular standards like SOAP, REST & XML, especially those already familar with Visual Studio.

The Azure Services Platform will allow developers to build applications out “in the cloud” that are available to PCs, online users and everyone in between, including thin clients like the iPhone or netPCs. Windows Azure will be the component for hosting and scalable storage, computation and networking for Web services.

Other key components of the Azure Services Platform (which I’ll avoid calling an ASP, as much as the shoe might fit) include:

• Microsoft SQL Services
• Microsoft .Net Services
• Live Services,
• Microsoft SharePoint Services
• Microsoft Dynamics CRM Services

The introduction of Azure is about much more than simply competing with Amazon or Google. It’s about finding a way to remain relevant in future that might not involve everyone using Windows as a desktop operating system, Office for office productivity applications or Exchange for email, at least as we recognize them.

Microsoft is now pitching a vision to businesses that resembles a pay-as-you-go model, the sort of paradigm that might make sense to, say, early adopters of IT chargeback systems. If a business wants to add on more services, liked hosted email or application storage, it can increase or add a subcription. Azure will provide a common foundation for the Live versions of its applications to be run — and businesses a means to save money by hosting services externally.

This isn’t going to happen right away — Microsoft won’t actually roll anything out until 2009. Developers are still getting acquainted with new tools for building hosted applications.

If this vision catches on, however, jokes about this cloud OS being vaporware are likely to be blown away, along with some of the concerns about Microsoft’s long-term prospects for growth in this Internet age.

This week’s tech buzzword is Jabber.  Jabber is another addition to the Cisco Software Family.  What? You thought Cisco was a hardware business? Think again.

When Cisco bought Jabber, the open source instant messaging app known for interoperability,  they didn’t just buy a corporate IM — they bought another key component for their vision of the future. A future where collaboration is built into the network rather than on top of it.

That’s right. While everyone’s been buzzing for months about Google and Microsoft and Yahoo,  Cisco’s been quietly rebuilding the bones of your network so you can get more value out of the infrastructure you already have in place.  Some people call the concept unified communications. Some people call it ubiquitous computing. It might just be simpler to call it Cisco Software.

Rumor has it that Cisco plans to include Jabber as part of its WebEx collaboration platform.  Makes sense. It fits in quite nicely with their telepresence technology too. The Jabber announcement comes less than a month after Cisco announced plans to buy PostPath, a Linux-based email and calendaring outfit, for $215 million.

Here’s my next prediction:  CISCO will buy Twitter.