Are you up for a thought experiment?
Let's say that you were given the keys Microsoft's cloud. You could move any platform, application, database, or service from your campus to Microsoft's distributed data centers. Let's further say that Microsoft, in an effort to gain higher ed mindshare and the opportunity to up-sell services and enterprise platforms, was offering its cloud to you for no money. Unlimited processors, bandwidth, and storage. Service level agreements. Long-term contracts.
Where would you start? What would you do?
1) Moodle: Cameron D. Evans, the CTO of Microsoft Education, North America, mused about a Microsoft cloud based Moodle on his blog.  He asks the Moodle community members if this would be something they would be interested in. To quote Cameron: "Now, let me be super clear. Microsoft currently has no plans to host Moodle. That’s a decision for the Moodle community to pursue with Microsoft. Microsoft does have the cloud infrastructure to give unparallel scale and availability to Moodle with Windows Azure." How would a Microsoft hosted Moodle change the learning management equation? What could campuses do to innovate and advance learning with the dollars saved in licensing fees and hardware? Come to think of it, why limit our dreaming to Moodle? Couldn't any LMS that is locally hosted be migrated to the Microsoft cloud?
2) Lecture/Presentation Capture: Processing, storage, and display of captured presentations and lectures is already moving to the cloud. The model for Tegrity Campus leverages SaaS (Software as a Service) to ease deployment. One of the publishing options for Techsmith Camtasia Relay is to publish to its screencast.com  site. How much of a stretch would it be to move all the encoding, storage, and display of captured lectures to the Microsoft cloud? I've written before  that Microsoft should get into the lecture/presentation capture space - leveraging its cloud infrastructure seems like an excellent way to drive down costs while increasing diffusion and innovation.
3) Storage and Backup: Here I'm getting outside of my expertise (outside of the learning side of educational technology), but cloud storage and backup would seem like a natural candidate. I'm betting that what we think of as large and expensive storage needs would be a drop in the bucket when compared to what Microsoft handles on the corporate side. I have not tested Windows SkyDrive  - but the existence of this service under the Windows Live brand suggests that it could be scaled up.
What am I missing? Let's free our minds to grant the premise that issues such as privacy, security and compliance could be managed. Let's further go with the idea that it would be in Microsoft's strategic interest to be as generous and open with their cloud infrastructure as we can imagine. (Are these premises at all reasonable)? Allowing ourselves to fantasize, what could we come up for with total and free access to the Microsoft cloud?