Microsoft sees cloud computing as a way of enabling businesses to tap into the resources of the software company's infrastructure which offers scalability and high availability on a global basis.
But many organisations are still sceptical about the security of the cloud computing model.
John Shewchuk, technical fellow at Microsoft, told Computer Weekly in a podcast interview how cloud can enable better security and regulatory compliance.
Because of these concerns, Microsoft is developing software, particularly in the area of access and identity management, that can move between on-premise and cloud-based applications and services.
"We do not expect or insist that organisations go to the cloud for all their data, although there are some compelling drivers, such as speed and cost benefits," he said.
Microsoft is developing a lot of the technologies around rights federation and rights protection so that companies can use them quickly and easily in the cloud environment, said Shewchuk.
"The collaboration, secure messaging and secure endpoint technologies we deliver today will be the key enablers for organisations," he said.
Shewchuk said that like the move to outsourcing functions such as payroll, cloud-based computing services will eventually become commonplace, but will require across-industry collaboration. "We have to work as an industry to get ready for the cloud."
This includes technology suppliers, regulators and business organisations that are willing to take part in trials of new technologies, he said.