You know times are a’changing when the CEO of Microsoft announces that 90 per cent of his staff will be working on cloud platforms by next year. Steve Ballmer even went one step further when he said he was “betting the company” on the Windows Azure cloud platform.

These are serious announcements and demonstrate how seriously he is taking threats from the likes of Amazon, Google and other cloud services vendors.

Ballmer was presenting at the University of Washington’s Computer Science and Engineering Department, hi presentation entitled “The Cloud: Exciting New Possibilities “.

He stated that private companies would be setting up their own clouds over the coming years and that the public sector was likely to be a big cloud customer over time.

Ballmer also noted there would be three versions of the Windows Azure platform, the public one, a customer one (presumably onsite), and a government one but that it would take some time before governments would be comfortable with data existing outside their jurisdiction.

And at the same time we heard that the new mobile OS, Windows Phone 7, won’t run any applications written for older versions of Microsoft’s phone software.

This marks a dramatic change in Microsoft policy as it makes a clean break with the past. In a blog post last Thursday, Microsoft executive Charlie Kindel, who handles contact with outside software developers, said that jettisoning support for older applications was necessary to make the new operating system as powerful and user-friendly as possible.

This is sure to cause concerns to developers that have already created software to run on earlier versions of Microsoft powered handsets. It may also annoy businesses that have already developed and issued software to staff that run on the soon to be superseded platforms.

Microsoft is leaving behind tens of thousands of applications written for different versions of Windows Mobile that go back more than a decade. Many were designed for phones that came with styluses for precise input. Windows Phone 7 Series is designed for touch screens that work well with fingers but don’t work with fine styluses.

It could be a mistake to underestimate the ability of the mobile applications developers of today. Given a flexible and modern platform with a usable, easy to attain development kit these masters of the mobile domain will, no doubt, have their applications up and running on the new platform in no time.

For Microsoft, the changes in direction are dramatic.  Let’s hope that Ballmer is a good betting man!