Speaking at a lunch meeting in Seattle on Thursday, Microsoft Corp. CEO Steve Ballmer tried to explain the difference between the words "as" and "and" when placed between the words "software" and "service."

In the midst of a shift in the technology industry toward using browsers to access remotely hosted applications, called "software as a service," Microsoft is promoting its own version of the phenomenon: "software and service."

"For most people it's a nuance, but it's really important in our place," Ballmer said.

To Microsoft, software and service means a balanced model that involves a smart client device, which could be a PC, mobile phone or TV, combined with "smart computers doing work on your behalf in the center of the Net," Ballmer said. "So we're trying to carve out a balance." Technical decisions determine which components run where, Ballmer said.

By contrast, software as a service often refers to Internet-based applications that are accessed by end users through their browsers, without requiring specialized software on the user device. The difference between "software as a service" and "software and service" is important for a company such as Microsoft, which earns billions of dollars in revenue every year by selling PC software.

Ballmer spoke at an annual luncheon in Seattle hosted by the Technology Alliance, a group started by Microsoft founder Bill Gates' father and dedicated to fostering education and an entrepreneurial environment in Washington state.

Beyond attempting to clarify the difference between two very similar phrases, Ballmer touched on a variety of topics, including the challenge of developing products to be useful yet simple. "It's a great balancing act," he said. "A brilliant design gives power for those who want it and great ease of use whether you want that power or not." Never one to shy away from promotion, Ballmer said the latest version of Office manages that balance particularly well.

The IDG News Service is a Network World affiliate.