Microsoft CEO Ballmer Pumps Cloud, Tablets at WPC 2010

Microsoft CEO Steve Ballmer kicked off the company's Worldwide Partner Conference by pushing the cloud, tablets running Windows 7 and Windows Phone 7 as the way of the smartphone future.

WASHINGTON, D.C.-Microsoft kicked off its annual Worldwide Partner Conference here July 12 with a high-decibel keynote address by Microsoft CEO Steve Ballmer, who promoted the cloud as the way of the future, and suggested that a family of tablet PCs running Windows 7 would appear in the coming months.

Ballmer also touted the upcoming Windows Phone 7, which the company is pushing as a total reset of its smartphone operating-system franchise. Although Microsoft's Windows Mobile holds a certain percentage of enterprise users, it has been losing ground in the consumer area to a variety of strong competitors, including Google Android and Apple iPhone.

"This is a terribly important area to us," Ballmer told the audience filling the Verizon Center, referring to both Windows 7-based tablet PCs and Windows Phone 7 devices. "We need to push this from a Microsoft perspective: we want to give you a great, consumer-oriented device, a device that is manageable with today's IT solutions."

Within the next several months, Ballmer added, "You will see a range of Windows 7 slates. They will run Windows 7. They will run Office. They will accept ink- as well as touch-based input."

He also continued his months-long mea culpa for Microsoft's anemic performance in the smartphone arena: "We missed a generation with Windows Mobile. We really did miss a release cycle." However, he promised, Windows Phone 7 will change all that: "We will give you a set of Windows-based devices that people will be proud to carry."

Unlike competitors such as the Apple iPhone, which rely on a user interface that displays applications on a menu-like screen, Windows Phone 7 aggregates Web content and applications into subject-specific "Hubs" such as "Office" and "Games."

The nearly weeklong WPC is a chance for Microsoft to promote the benefits of the company's partner network, and offer those partners a wide variety of events such as hands-on labs.

As it kicks off the conference, Microsoft finds itself amidst the proverbial best and worst of times. The company's flagship software platform, Windows 7, has proven an exceptionally robust bestseller in the months following its October 2009 release, and business spending-the key to many of its partners' livelihoods-has been slowly reviving after years of global recession.

However, if Microsoft can claim victory in its core businesses, some of its more creative initiatives have also taken an expensive beating. Last week, the company was forced to discontinue its Kin social-networking phones due to anemic sales. Although the Kin phones were aimed at a fairly narrow demographic-social-networking-happy teenagers and young adults-its rapid death has led to outside pundits' questioning Microsoft's ability to execute its broader plan for Windows Phone 7, which is due for release on select devices later in 2010.

Microsoft also faces growing challenges to some of its core businesses. While its Office franchise holds the lion's share of the consumer and business audience, cloud-based productivity software such as Google Docs threatens to take its own piece of the market; to compensate, Microsoft is introducing Office Web Apps that offer stripped-down Office functionality via Windows Live. But should consumers and businesses continue to gravitate to the cloud-itself dependent on public and private clouds becoming more prevalent and reliable, an inevitability in the eyes of many analysts-then Microsoft may need to start making a more aggressive argument for why those audiences should stay with desktop-based software.

Microsoft is using the conference to assure its partners that it recognizes the growth of the cloud. "We've been shouting about -O Cloud' at the WPC now for about four years," Ballmer said during his keynote. "There's no question that Microsoft has chosen to embrace that path together with all of you, and there's no question that there's more to do."

Ballmer suggested that Azure, Microsoft's cloud-development platform, now had 10,000 users, and that the company controlled 30 percent of the virtualization market. He framed the cloud as capable of removing much of the cost and complexity associated with IT departments-at least on the customer side. For Microsoft, though, the increased use of the cloud brings with it a particular brand of challenge.

"When customers put their data in our system," Ballmer said, "when they entrust more and more of their data and operations to us, there's the need to do a better job on reliability, security, privacy."

Much of Microsoft's ability to handle the IT infrastructure associated with enterprise-facing clouds, he added, was coming courtesy of its work in a number of more consumer-related initiatives-particularly Bing, the company's search engine.

"Once you have millions of people trying to figure things out and make decisions and mine data, you find out a lot about the technology that allows you to statistically understand what users are doing," Ballmer said. "-Show me industry-wide sales of computers by company,' that is a BI question that I've inputted into a search engine. How do we apply that to enterprise technologies? How do we do better at bringing together enterprise data with industry data?"

He suggested that a Microsoft program code-named "Dallas" was developing ways to pull together enterprise and cloud data in a way that allows companies to make more informed decisions.

From Microsoft's perspective, the cloud is also driving server advances. "We have learned a lot through running Windows Live, Hotmail, Bing," Ballmer said. "These are some of the highest volume services run on the Internet today. When you run a highly scaled, highly dynamic service, you need a whole new approach to running a data center." The need for Microsoft to redesign its own infrastructure, apparently, has led to advances in how it develops the infrastructure for other companies' cloud-based enterprise programs.

In previous months, he has insisted that his company is "all in" when it comes to the cloud. The opening morning of WPC reemphasizes that point.