Ballmer Outlines Microsoft's Software-As-A-Service Plans

In a Tuesday keynote speech to more than 12,000 attendees at Microsoft's worldwide partner conference in Denver, Ballmer provided insight into the Windows Live platform and how new technologies like Silverlight mark the beginning of the transformation to a new user interface model.

Ballmer peppered his keynote with demos and testimonials about upcoming technologies, focusing on Microsoft's Google-like Windows Live services and on Silverlight, Microsoft's fledgling Adobe Flash rival.

Silverlight demos have been in the spotlight at all of Microsoft's recent conferences, including Mix07 and TechEd. Ballmer's keynote showcased an application created by Microsoft partner Frog Design, ilustrating the power of the platform Microsoft hopes will bring rich Windows functionality to mobile devices and Web browsers.

One big question partners have had about the future of Windows Live is what will happen on the back end with servers, which used to be on customers' premises, but increasingly are hosted and on the Internet, Ballmer noted.

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The emergence of server farms, and the ability to adjust capacity on demand has enabled the focus to move from back end servers to shared computation handled on customer premises, he added.

"This is a long term migration to bring the best of the web and best of the enterprise together," said Ballmer.

Along with the new computational platform comes a need for a new services platform, which will follow the past patterns of desktops, servers, and mobile platforms, Ballmer said. "We're in the process of building out a services platform in the cloud," he said. "We're building out a services based infrastructure, with a new management model and new development model. The programming model remains .Net, which is great.

Ballmer encouraged partners to sell Exchange hosted services, and said Microsoft will start offering managed communications and collaboration services based on work the vendor has done with Energizer. "We want you to resell these services, and also host your own collaboration sevrices using Exchange and Sharepoint," he said.

Microsoft is also building directory services and device management to connect with back end services world, with the same types of applications rewritten to fit this low cost platform, according to Ballmer. "This is an ambitious project for us, but it's important," he said.

Windows Live has been a consumer platform thus far, but Microsoft is opening it up in a way that will create additional services and customization opportunities for business partners, Ballmer said.

Ballmer touched on the elephant in the room -- Microsoft's "software plus services" vision -- but held off on delving into specifics. In her keynote tomorrow, Microsoft channel chief Allison Watson is slated to introduce a new "software plus services" framework to guide partners into the uncharted waters.

While Microsoft will deliver more traditional software this year than hosted, on-demand offerings, "the era of software plus services is now," Ballmer declared. Customers are pushing Microsoft to offer more hosted services, and partners will need to adapt their business models to accommodate that reality, he said. In the consumer space, Web services are already firmly in the mainstream, and large enterprises are developing strategies and incorporating it into their decision-making, Ballmer said.

Ballmer's keynote was relatively restrained, but he ended with an enthusiastic exhortation to partners to jump aboard Microsoft's moneymaking train.

"We've got the home fires stoked," he said. "Let's get out there, let's knock the ball out of the park, let's make sure we execute very well, so that we make money and you do over the next 12 months."