During an address to other CIOs, Tony Scott shared details of his efforts to move various Microsoft systems to the cloud

He may run IT for one of the best-known names in technology, but even Microsoft’s CIO is grappling with new technology challenges like moving to the cloud and handling consumer electronics that employees bring to work.

Tony Scott, CIO for Microsoft, spoke Wednesday to public sector CIOs gathered at the company’s headquarters in Redmond, Washington.

Microsoft MCTS Certification, MCITP Certification and over 2000+ Exams at Actualkey.com

[ Get the no-nonsense explanations and advice you need to take real advantage of cloud computing in InfoWorld editors’ 21-page Cloud Computing Deep Dive PDF special report. | Stay up on the cloud with InfoWorld’s Cloud Computing Report newsletter. ]

His team manages over 200,000 Windows 7 and Office 2010 clients, 764,000 SharePoint sites, 1 million devices, 70,000 monthly Live Meeting sessions, and the Microsoft.com website, which attracts 1.7 billion hits per day.

“We are Microsoft’s first and best customer,” he said. “That’s a role we take seriously.”

One of the first functions that he moved to the cloud was Microsoft.com, which he said is the world’s largest corporate website. That is now running on Azure, Microsoft’s platform-as-a-service offering.

He’s in the process of moving Microsoft’s volume licensing system to the cloud. That’s the system that company CEO Steve Ballmer told Scott, during his job interview, is the most important system at Microsoft.

It’s also the system that his IT staff ranked toward the bottom when asked about the health, supportability, and flexibility of all the company’s systems, he said.

“It’s probably the single biggest system in Microsoft in terms of transactions and important company information,” he said. The transition to running it in the cloud is well under way, he said.

Like most companies, Microsoft has struggled with some of the issues that moving to the cloud creates. Scott recommends, for example, making sure that CFOs are well informed.

“We’ve found awareness is half the battle,” he said. CIOs should describe to CFOs exactly what moving to the cloud will cost and what kinds of cost spikes might occur potentially at different times of the year. At Microsoft, that was good enough to satisfy his CFO’s need for predictability, Scott said.

In addition, using cloud services has different implications for chargebacks. At Microsoft, Scott forced all costs into two different categories. One includes costs that can be directly attributed to and thus charged to a business unit.

The other includes things like storage or network bandwidth that’s too difficult or expensive to figure out who is consuming how much. Microsoft simply spreads those costs across the company evenly. IT’s role is to make sure those services are bought and used efficiently, he said.

Scott, like many CIOs, has also come up with new policies to handle the kinds of consumer devices that workers are bringing into the office. Rather than make a decision based on individual devices, Microsoft has developed a framework that determines what capabilities a device must have in order for users to do certain things on it, he said.

“Devices come and go. I can’t pivot my infrastructure every time there’s a new device,” Scott said.

While in a widely covered cutback over a year ago Microsoft stopped paying for employee iPhone contracts, IT still supports the phones. Microsoft workers have iPhones, iPads, Droids and many other devices, Scott said.

In addition, Microsoft gave all employees Windows Phone 7 devices. IT can control those devices and do things like enforce a PIN because the phones support Activesync. “Wherever we have Activesync we know what we can do with the device,” Scott said.