Microsoft unveiled Windows Azure and their cloud computing strategy at PDC2008 earlier this week. Unlike Windows 7 -- which Microsoft is positioning as an improved version of Windows Vista -- Windows Azure not only signals a big change in how Microsoft delivers products, but also what those products are.

As significant as the Windows Azure announcement is, Microsoft's Ray Ozzie also singled out Amazon as a clear leader in the cloud computing space during his opening PDC2008 keynote. Here's the key excerpt from Ozzie's speech:

Some months after we began to plan this new effort, Amazon launched a service called EC2, and I'd like to tip my hat to Jeff Bezos and Amazon for their innovation and for the fact that across the industry all of us are going to be standing on their shoulders as they've established some base level design patterns, architectural models and business models that we'll all learn from and grow.

Visit the Microsoft.com press site for the complete text of Ray Ozzie's PDC2008 keynote.

So while Microsoft is talking about cloud computing in the future tense, Amazon is already delivering cloud computing options, primarily for Web 2.0 application developers. Amazon's Elastic Compute Cloud (EC2) recently added support for Windows Server and SQL Server, and its Amazon Web Simple Storage Service (Amazon S3) provides inexpensive storage for web applications.

To underscore the usefulness of Amazon's cloud computing approach, the Amazon Web Services team announced that Windowshop.com -- a new 3D shopping front-end for Amazon.com -- is running entirely off Amazon S3. Here an excerpt from the announcement by AWS team member Jinesh on the AWS team blog:

Let me tell you why I am excited about windowshop.com. It's because Amazon's Windowshop is fully powered by Amazon S3. All the high-quality media, audio, images are served hot from Amazon S3 and at lightening speeds in real-time. Now that's cool!

I've created a screencast of Windowshop.com in action and posted it to ITTV.net, which is embedded below.