For the past several months, anyone who's asked me about the latest big new thing in IT has gotten an earful about Amazon's Elastic Compute Cloud, or EC2. With this service, which I reviewed last year, you pay Amazon 10, 40 or 80 cents an hour (depending on the RAM, storage and CPU) and you get a virtualized server running in one of Amazon's data centers.

This flexible machine hosting, combined with software appliances that bundle an operating system with your application of choice, lets you worry about your business workloads, and leaves all the details around physical machine maintenance, connectivity, and power consumption to a firm that probably boasts more data center management expertise than yours does.

It's a compelling model, and one that offers all companies, but small companies in particular, a route for scaling up their Web-based businesses very quickly. EC2 also gives larger companies with their own data center capacity the option of turning to "the cloud" to handle spikes in traffic, rather than requiring these businesses to over-provision to meet occasional capacity crunches.

Right now, however, there's a big asterisk floating alongside EC2. The service, which is based on technology from the open source Xen hypervisor project, is a Linux-only proposition. This works out just fine for businesses built on the Linux, Apache, MySQL and Perl/PHP/Python (LAMP) stack, but EC2 doesn't offer much to firms that rely on Windows Server applications.

While this Windows support asterisk signals a limitation of EC2, I contend that this bit of rhetorical punctuation would be best interpreted as a wake up call to Microsoft. After all, I'm not the only one who's taken note of EC2. Red Hat has teamed with Amazon to make Red Hat Enterprise Linux available in Amazon's cloud, complete with tools to help manage mixed in-the-cloud and on-premises server deployments. While many businesses currently rely on Windows Server, I'm sure that Red Hat and other Linux platform vendors would be only too happy to help customers migrate to Linux-based, cloud-ready alternatives to companies' Windows-anchored applications.

As luck would have it, Microsoft now boasts its own virtualization platform technology, in Windows Server 2008's Hyper-V. Building out a Windows Compute Cloud (WC2) service would give Microsoft the opportunity to demonstrate that its new hypervisor is capable of powering a major virtualized infrastructure--a sorely needed proof-point for the brand-new Windows component. What's more, a WC2 platform would be a major boon to Microsoft's channel partners, particularly those selling to SMB customers for whom hosting their own on-premises servers is an unwelcome diversion from running their businesses.

Cloud computing services certainly present challenges, such as dealing with the added latency and security issues that come with entrusting machines to remote providers. And, of course, there's the specter of service outages, to which users of Amazon's EC2 and Simple Storage Service offerings were treated for a few hours just last week.

To some extent, however, we're all headed cloudward for our computing, and our vendors will either lead us there, or be left scrambling to follow--Microsoft included.