As a side note, and to pg's point, Microsoft did make some very smart Web 2.0 acquisitions from Silicon Valley in the years since --most notably LinkedIn and Github--, and let them run relatively independently.
> So if they wanted to be a contender again, this is how they could do it:
Buy all the good "Web 2.0" startups. They could get substantially all of them for less than they'd have to pay for Facebook.
>Put them all in a building in Silicon Valley, surrounded by lead shielding to protect them from any contact with Redmond.
There is indeed a large gap in the market between outsourcing all your infrastructure to Hyperscalers vs. hosting it on DIY-bare-metal and/or VPC providers. An open source alternative to AWS would do much to fill that gap, and we are building just that at Ubicloud (I'm one of the co-founders).
So far with Ubicloud, you get virtual machines, load balancers, private networking, managed PostgreSQL, all with encryption at rest and in-transit. The Ubicloud managed service uses Hetzner bare metal as one of its hosting providers, which cuts costs 2x - 10x compared to AWS/Azure. Would love to hear any feedback if you'd like to give it a try, or go through the repo here: https://github.com/ubicloud/ubicloud
You can think of Ubicloud as software that takes bare metal servers as its input, and provides VMs and other cloud infrastructure services as its output. You can self-host Ubicloud on your own hardware, or use it as a managed service.
Comments below are on point: Compared to OpenStack, Ubicloud is simpler, comes with a managed service that you can use in minutes (vs days/weeks), and provides more services such as managed databases.
Compared to Kubernetes, Ubicloud covers layers both above and below Kubernetes. For example, running K8s on AWS/Azure/GCP depends on having VMs where the pods can run on. Similarly, running a managed database service on K8s requires much more than the basic K8s service itself.
Put differently, all major cloud providers have proprietary software similar in purpose to Ubicloud, which they use to provide their core cloud services. Using AWS as an example, services like EC2, RDS for managed Postgres, or EKS for managed Kubernetes, all run on this type of software. Ubicloud makes this software open source, and allows it to run anywhere--not just on AWS data centers.
> So if they wanted to be a contender again, this is how they could do it: Buy all the good "Web 2.0" startups. They could get substantially all of them for less than they'd have to pay for Facebook.
>Put them all in a building in Silicon Valley, surrounded by lead shielding to protect them from any contact with Redmond.