"We do believe that there will be a set of services that our midmarket customers, and small, will be interested in using and running—anti-virus, anti-spam," Ballmer said in his keynote address in Redmond, Wash.
"You will see us respond and address those needs, along with [providing] a variety of other services that we will announce over the next 12 months."
With respect to hosted CRM (customer relationship management)—an area that has become the bellwether for on-demand success—Ballmer said Microsoft Corp. will "provide details to come, when appropriate."
Microsoft is not alone in sidestepping questions about its intentions regarding on-demand software, particularly in the CRM arena.
SAP AG, which competes with Microsoft Business Solutions in providing applications to the midmarket, is likewise noncommittal about its intent to offer software built from the ground up to be hosted.
Rather, SAP has said in media reports that it "continues to evaluate the market opportunities."
The focus on hosted or on-demand software has intensified with the recent runaway success of Salesforce.com, which boasts about 308,000 subscribers and nearly 17,000 customers.
Using Salesforce.com as an example, both Microsoft and SAP, of Walldorf, Germany, pointed to the inadequacies of current on-demand offerings: the relative inability to customize and integrate on-demand software.
"We certainly see a balance" between hosted and on-site software, Ballmer said. "We are absolutely working very hard. We expect to give Salesforce.com a run for its money by having hosted and on-premises solutions."
Salesforce.com, at this point nearly synonymous with on-demand software, offers the capability to customize its applications and integrate with third-party providers.