Microsoft's Ballmer, Ozzie Talk Tablets, Cloud at D8

Microsoft CEO Steve Ballmer and Chief Software Architect Ray Ozzie take the stage at the D8 conference to discuss a multitude of issues currently facing the tech industry, including the embrace of cloud computing and the rise of tablet PCs. Ballmer takes issue with Apple CEO Steve Jobs' previous D8 comments that the traditional PC would fade away, insisting that the functions a PC performs will always be relevant. Ballmer also holds that future keyboard-free devices will still run Windows.

Microsoft CEO Steve Ballmer, accompanied by Chief Software Architect Ray Ozzie, took the stage at the D8 Conference on June 3 to discuss hot topics such as smartphones, the cloud and tablet PCs. Much of the conversation centered on Microsoft's performance in the consumer market, where it finds itself locked in fierce competition against makers of products such as the iPad and mobile devices running Google Android.

Onstage, both Ozzie and Ballmer told The Wall Street Journal's Walt Mossberg that the seismic changes currently under way within the tech industry are only beginning and, because of that, Microsoft will eventually have opportunities to reclaim market share in areas such as smartphones. A rough blow-by-blow of the conversation can be found here, although it lacks the accuracy of a polished transcript.

One of the first questions dealt with the general movement toward the cloud, which presents a potential challenge to Microsoft, with its traditional lock on the desktop.

"There's nothing bad for us in the trend. It's all good," Ballmer insisted. "But it's a transition and as such it's a period of tumult. So we need to be smarter and more vigilant. But not because we're moving from a world that's fundamentally good for us to a world that's not. We're moving [from] a world that's good for us to a world that's potentially even more good for us."

But with the growth of the cloud, and the rising popularity of mobile devices, will traditional desktops and laptops fade in popularity?

"The real question is, 'What is a PC?'" Ballmer asked the audience. "Nothing that's done on a PC today will get less relevant tomorrow. I think there will exist a general-purpose device that does anything you want, because [some] people don't want multiple devices or can't afford them."

In that vein, Ballmer addressed comments by Apple CEO Steve Jobs, who suggested during another D8 talk on June 2 that the traditional PC was equivalent to the trucks that, while ubiquitous at the beginning of the 20th century, declined in prevalence as the lifestyle of the majority of Americans evolved beyond the agrarian. "Windows machines will not be trucks," Ballmer said, while acknowledging that PC form factors will continue to evolve.

Ray Ozzie predicted that the tech world will see a greater diversity of devices in coming years.

"I think there's going to be success in a number of form factors-in the pad form factor, in the tablet mode. I think there will be appliancelike screens that will be in our living rooms," Ozzie said. "There are certain fundamental differences in productivity in consumption and creation experiences, though. Both must exist on these devices."

Ballmer acknowledged that lightweight, keyboard-free devices will run Windows, which could be customized depending on the needs of a particular product. However, he also defended Microsoft's adherence to a stylus as an input method on touch screens, which has been derided in some circles as a relic.

"Do we think people want to take notes and draw. What's the best way to do that? Well, there are different ways to do that and we'll support them all." Ballmer said. "Today, we offer devices that do use a stylus. I certainly believe that people do want to take the things that they do today with pencil and paper and do them with new technologies."

But both men seemed to imply that tablet computing had a long way to go, evolutionarily speaking. "The software has not kept up with the hardware here," Ozzie said at one point. "We haven't yet with touch even figured what the control architecture should be."