Cloud computing is fast on its way to becoming a meaningless, oversold marketing slogan. In the midst of this hype, it is easy to overlook the fundamental change that is occurring. Computation, which used to be confined to the machine beside your desk, is increasingly centralized in vast shared facilities and at the same time liberated by battery-powered, wireless devices. Performance, security, and reliability are no longer problems that can be considered in isolation -- the wires and software connecting pieces offer more challenges and opportunities than components themselves. The eXtreme Computing Group (XCG) in Microsoft Research is taking a holistic approach to research in this area, by bring together researchers and developers with expertise in data center design, computer architecture, operating systems, computer security, programming language, mobile computation, and user interfaces to tackle the challenges of cloud computing.