Addressing a gathering of government contractors in Washington, D.C., Ballmer said that the Redmond, Wash., company will release a host of new offerings over the next 12 months, including an accounting product for very small businesses.
Microsofts three largest customers are the U.S. Army, the U.S. Navy and the U.S. Air Force, and the company has 500 employees in the capital. It partners with six other software vendors to provide products to defense contractors.
The gathering of contractors at the Capitol Hilton was hosted by the Northern Virginia Technology Council, the Tech Council of Maryland and the Washington, D.C., Technology Council.
One of the most crucial developments in the industry today is the migration of software sold as a product to software sold as a service, and the goal of Microsofts "Live" technology is to provide a platform in the network cloud, Ballmer said.
"I think that this is probably the most important trend, frankly, in the software business over the next two to three years," he said. "The basic nature of software will change."
Ballmer assured the audience that Microsoft plans to continue its strategy of product integration.
"We believe that what we provide you from Microsoft is bigger than the sum of its parts," Ballmer said, adding that interoperability with other vendors products is not inconsistent with the strategy.
For contractors looking for insider tips on how to get their hands on one very popular holiday wish list item this year, however, Ballmer had nothing to offer. "No, I dont know how you can get an Xbox 360," he said. "Wait in line at Best Buy. No, the Ballmer kids dont have an Xbox 360 yet."