Windows Azure, or the operating system formerly known as Windows Cloud. Azure is basically a platform for developers of web applications. It combines hosting and tools for managing service delivery and will compete directly with Amazon's EC2 platform.
Developers can build applications using existing Microsoft tools like Visual Studio. Azure can be used to add web capabilities to existing desktop applications or to host completely cloud-based apps. In other words, you could build an online calendar or task management service and host it on Windows Azure, or you could create a desktop calendar that synchronizes with a web calendar. Or you know, something far more creative.
Microsoft unveiled the platform at the Professional Developers Conference today, saying that what's being made available today is just a community preview. More features will be available when the full version is released.