If you take the time to understand what Azure is then you'll realize what your saying is a load of crock! Azure completes the story for an OS in the cloud. What it accomplishes is to create an OS in the cloud for us developers and enterprises to build solutions on. Much like windows did for desktops, Azure will do for the cloud!
As a developer that builds web applications all we need to now do is build our application and then click a button (minor configuration) and it scales to the web. We don't need to worry about setting up several web servers, and appserver, a database server, scalling, load balancing, etc Azure is the kernel OS that will manage all this for us. Ofcourse we have full control of the config parameters if we so choose BUT it takes alot of the pain of building scalable cloud applications away.
Building a Twitter or Digg on Azure is now dead simple!
As for the argument of too many flavours of OS's, Window's 7 will go along ways to fix that problem BUT the truth is trying to create a single flavour of OS for everyone is just impossible. A device OS is completely different to a Desktop OS which is completely different to a Server OS, you can't expect to have one flavour of OS that will equally do justice to all 3 different scenarios.
Azure rulez!
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