From Jon Udell and Tim O’Reilly (and here, about the headline):

When entrepreneurs pitch their software-as-a-service ideas to me, I always ask how they plan to compete with what I call the galactic clusters — Amazon, Google, Microsoft, and Yahoo. These giants have set a high bar for Internet-scale operations, and they’re relentlessly pushing it higher.

The answer usually comes back: “We’re confident we can scale out as needed.” Maybe yes, maybe no. A lot depends on architectural choices and operational competence. But either way, if you are merely a planet, you don’t want to butt heads with a galaxy.

If you can’t beat ’em, join ’em. In the days of the old giants, that meant moving into a platform ecosystem, such as Microsoft’s or Apple’s, and then nimbly occupying the available niches until the landlord decided to kick you out.

Will the era of the new giants be any different? Tim O’Reilly raised this key question on his blog. “Being a developer ‘on someone’s platform’ may ultimately mean running your app in their datacenter,” he wrote, adding, “Microsoft has a key advantage over open source, because the Windows Live team and the Windows Server and tools team work far more closely together than open source projects work with companies such as Yahoo!, Amazon, or Google.”

It’s both a stunning observation and a stirring call to action. Neil McAllister, who edits this column and writes the Open Enterprise column, said last week that Microsoft can no longer laugh off the long-heralded “year of the Linux desktop.” I agree, and I saluted Neil the other night as I installed the latest Ubuntu release on my aging ThinkPad. But the desktop isn’t the battleground it once was. I float like a butterfly from Windows to OS X to Linux. My home is in the cloud, and that’s the next frontier for the champions of free and open commodity infrastructure.