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Ballmer: Microsoft's Partners Must Embrace the Cloud

• By Kurt Mackie
• July 13, 2010

Microsoft's partners should get onboard with Microsoft's business shift to the cloud or be left behind.

Such was the concluding message of Microsoft CEO Steve Ballmer in a keynote talk given at the Microsoft Worldwide Partner Conference in Washington, D.C. He noted in Monday's talk that some partners had once urged Microsoft not to make the move to the cloud. The cloud model causes "scary" changes for all.

"The cloud does change and makes us reinvent our business models, yours and ours," Ballmer said, according to a transcript. "But it's a change that's inevitable. It's a change that allows us all to deliver new value."

Ballmer said that he expected to hear from partners at the event about improving channel conflicts and increasing profit margins for partners. Microsoft would "factor those inputs in," Ballmer said, but ultimately, partners have to choose.

"If you don't want to move to the cloud, we're not your folk," Ballmer said.

In addition to the cloud, Ballmer strongly emphasized Microsoft's mobile efforts during his keynote address. He said that Microsoft is committed to putting Windows 7 on slates and Windows Phone 7 Series phones. He didn't mention the Kin phone that Microsoft killed after two months on the market, but he did mention some slate partners to come.

"So, over the course of the next several months, you will see a range of Windows 7-based slates that I think you'll find quite impressive," Ballmer said. "Tami [Reller] is going to show you some of those today [Monday]. They'll come from the people you would expect, from Asus, from Dell, from Samsung, from Toshiba, from Sony."

Microsoft stayed quiet for many months about its slate hardware partners. The last big slate partner news came in January, when Ballmer announced that Hewlett-Packard would run Windows 7 on the HP Slate device. HP has since bought Palm and announced plans to put the Palm webOS on slate devices. HP has declined to mention its slate plans for Windows 7 in recent months. The HP device wasn't mentioned at all in Ballmer's partner keynote.

The slate device shown during Tami Reller's keynote address was the Copia Reader, which uses a combination of Windows 7 touch screen technology, Windows Presentation Foundation and Azure technologies. It was highlighted as an example of using a rich client supported by cloud-based services.

Ballmer said that Microsoft is "hardcore" in pursuing Windows 7 on mobile devices but he admitted that "we missed a generation with Windows Mobile." He suggested that Microsoft's mobile strategy could address both the consumer and enterprise segments simultaneously.

Microsoft generally rejects the view that the Internet cloud will just be married to thin-client mobile devices. "The world of tomorrow is a world of smart cloud talking to smart devices," Ballmer explained. He noted that the hardware-accelerated graphics capabilities enabled by Internet Explorer 9 in combination with HTML 5-based code is an example of "smart devices talking to the cloud."

Ballmer's presentation noted a number of Microsoft accomplishments in onscreen slides, including the following nuggets:

• Windows 7 has a "94 percent satisfaction rate"
• Office 2010 has nine million users
• Windows Azure grew to 10,000 paying customers in less than a year
• SQL Server 2008 R2 has had 670,000 trials in less than two months
• Microsoft Online Services has 40 million paid seats

Of Microsoft's 640,000 partners around the world, there are more than 16,000 online services partners -- a figure that has tripled in the last year, according to Ballmer's presentation.

Ballmer cited a Windows unit volume growth rate of more than 18 percent, saying that Window 7 was leading the way. "Windows sales, Windows unit volumes, will be over 350 million units this year," Ballmer said.

Check out all the WPC 2010 keynotes by clicking here.