Ballmer lays out future of software, services

Microsoft CEO Steve Ballmer says traditional software will transition over time to hosted services while incorporating the best of today’s desktop and device interfaces.

Denver – Microsoft CEO Steve Ballmer said traditional enterprise software is the here and now, but partners and end-users should start preparing for a world that will meld software and services. Ballmer laid out a roadmap for the future, not only for Microsoft but for all of the partners that build software on top of the Windows platform, during his keynote at the company’s annual Worldwide Partner Conference.

He said traditional software will continue to generate the bulk of sales revenue, but that a software-plus-services world is not far behind.

Ballmer began his keynote by circulating among the crowd shaking hands and clapping to build excitement. He then jogged to the stage where he huffed and puffed and bellowed the virtues of the 8,000 gathered partners.

His message was for everyone to get on the software-plus-services bandwagon, Microsoft’s version of the software-as-a-service trend now dominating industry hype.

In terms of the beginning of this new era, Ballmer said the time is now.

“We as a company are innovating, writing new software; we will be out with beta and design previews and we will be looking for feedback. The time to engage is now.”

He said the future would include elements of today’s technology combined with new service models of the future.“We need the best of the desktop, the best of the enterprise and the best of the online world. We need to bring together rich user interfaces, offline and online access, and what I call personal integration to go in and bring things together, integrate them, store them and link them together in unique and arbitrary ways.”

Ballmer said a good example today is Exchange and Outlook.

“Outlook is a rich client app. Outlook Web Access is an Ajax app that looks exactly the same, talks to the same backend. Office Outlook Mobile is a device form factor, and Office Outlook voice access makes this successful even vs. the telephone. And as Exchange has moved out to live in a hosted form it is moved to use HTTP protocols and is perhaps the closest model we have, I think, to what people will really want in the future. That is the user interface side.”

Ballmer then went on to demonstrate Silverlight, Microsoft’s new platform for rich Web-based applications, and said the back-end computation in the future would not be done on corporate deployed infrastructure but on large scale services.

“This is a long term migration to bring the best of the Web together with the best of the enterprise,” he said.

Ballmer said Microsoft would deliver on a services platform the same sorts of capabilities it delivers today in packaged software such as Windows Server, Active Directory and Microsoft Operations Manager. He said Microsoft would offer personal services for individuals such as Windows Live and Office Live, business services such as today’s hosted Exchange, communications and collaboration services, and online services such as Dynamics CRM.

He also mentioned the unveiling later this year of Version 1 of Windows Live Cloud Infrastructure services and said partners would be called upon to help resell all these services. “This is the set of things on the radar.” But he added that partners would still have a lot of opportunity in the short run to sell current and upcoming technology such as Vista, Office, Windows Server 2008, and SQL Server 2008. “The business we do this year will continue to be on traditional on-premise software,” he said.

He pointed out that the consumer wave of services adoption is now underway and that enterprise are now planning and testing hosted services.

“Many of the customers that I talk to are saying I am going with the new Exchange, the new SharePoint, the new Office, but I am going because I know you are gong to move those things to a hosted service and I want the benefits. Priority No. 1 in terms of our long-term outlook is this transformation,” Ballmer said. “It is an ambitious project for us, but it is very important.”

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