Can Microsoft be both the hosting providers' best friend and a hosting provider itself?

It sure hopes so.

At the recent Microsoft Hosting Summit, one Microsoft group welcomed partners with open arms, and tried to sell them on the continued benefit of putting software and services on Microsoft infrastructure.

Meanwhile elsewhere on campus, the Live legions are trying to make the company's "Live" infrastructure the best possible hosting infrastructure (hosted by Microsoft) for small businesses and consumers.

That irony is lost on precisely none of Microsoft's hosting partners. After the opening schpiel at the hosting summit, the floor was opened for questions. My sources don't remember the exact kick-off query, but the person on stage quipped: "At least the first question wasn't about Office Live."

Microsoft's position is that the channel should "leverage the Microsoft platform" adding value atop it, blah blah blah. Marja Koopmans, the designated Office Live channel person, says that partners could just end up moving to Office Live infrastructure themselves and concentrate on the applications. Hmmm. That's ok for ISVs, but not every partner is an ISV.

It is also true that Microsoft is just one of many industry giants making a mad land grab in the cloud (Now, there's a weird image.)

Google is the obvious mover and shaker here. Less visible but very interesting is what eBay and Amazon.com are doing. Both are striking out well beyond their legacies as online auctioneer and bookstore respectively. See this post from blogger Dana Gardner about the traction Amazon.com's Elastic Computer Cloud (EC2) infrastructure is getting among some tech companies.

At any rate, companies who host applications and services for customers have to look to their laurels. There's as obering section in a Tier1 Research handout Microsoft made available to hosting partners: The headline: "Hosters need to change or die."

More on that later.