Editor's note: We used Cover It Live for this event, so if you missed the live blog, you can still replay it in the embedded component below. Replaying the event will give you all the live updates along with commentary from our readers and CNET editor Josh Lowensohn. For those of you who just want the updates, we've included them in regular text here.
RANCHO PALOS VERDES, Calif.--Microsoft CEO Steve Ballmer and Chief Software Architect Ray Ozzie are slated to speak Thursday at the D: All Things Digital event.
Check back around 8 a.m. PDT for live coverage from the event. My less-than-shocking prediction is that, in addition to talking about Windows Live and Natal, Ballmer will also note that he is.
In the meantime, here'sfrom the D8 conference.
8:03 a.m. PDT: Hi all. Folks are just getting seated. I'm guessing it won't start until 8:10 or so...
8:09 a.m.: There's no live video, but I'll try to make you feel as close to the action as I can. There will be video clips later.
8:11 a.m.: They still haven't done the morning introductions, so we probably have another 5-10 minutes before Ballmer. Happy to answer any other Microsoft or tech industry questions while we are waiting.
8:11 a.m.: Josh Lowensohn: I'm guessing Natal won't do well for people with large fish tanks in their living rooms.
8:12 a.m.: I'm somewhat interested to see the interplay between Ray Ozzie and Steve Ballmer. They don't speak together that often.
8:15 a.m.: OK. we're getting the morning intro from Wall Street Journal managing editor Robert Thomson.
8:17 a.m.: More hoodie jokes--a reference to yesterday's performance by Facebook CEO Mark Zuckerberg who was sweating more than anyone since Nixon, prompting Kara Swisher to make him take off his hoodie.
Now he's making fun of the Dell Streak, showing a folded copy of The Wall Street Journal and holding it up to his head to make calls.
8:20 a.m.: OK, on to Walt Mossberg.
8:22 a.m.: Walt starts by asking where the broader economy is situated.
8:23 a.m.: "I would say developed world things have come off the lows, for sure. I think our industry is even more revved up about how good the economy is than maybe some others."
8:24 a.m.: "We've started to see some comeback in business spending and then we get the Greek question...I think people are asking now, what will happen. I don't think anyone is smart enough to know."
8:25 a.m.: Mossberg: Let's talk about the transition to the cloud. You guys are putting, for instance, a version of Office in the cloud.
8:26 a.m.: "I think the phrase is you are all in," Mossberg said. But, what about Google?
8:27 a.m.: Ray Ozzie: So many transitions are happening concurrently, more than at any time in the industry, he said. People and devices are all connected.
Ozzie: We're essentially at a shift for both enterprises and consumers in terms of how we consume IT.
8:29 a.m.: Ozzie: the same re-pivoting is happening in media and entertainment. Every screen is becoming more appliance-like.
8:30 a.m.: Ballmer disputes notion that everything is moving to the cloud. Even the Web guys are taking advantage of local resources and cloud. Everybody says it a little differently, but everyone is talking about doing things both locally and in the cloud.
8:31 a.m.: I'm not going to go too crazy on photos. That's what it looks like. It's mostly just conversation, not much stage theater.
Ballmer: You'll get really cheap devices, Ballmer said, but devices will have a reasonable amount of local processing power, storage, and graphics. Devices are actually not getting thinner.
8:32 a.m.: Ozzie: I think the key is that people want their devices to become more appliance-like. They want to buy it, log in, and light it up.
Ozzie: Applications will feel more "cached than installed."
8:33 a.m.: Ballmer: There's nothing bad for us in the trend. It's all goodness. But it's a transition and transitions are times of potential tumult.
8:34 a.m.: Ballmer: We're moving to a world that is fundamentally good for us to one that is potentially fundamentally even better. But Microsoft is getting new class of competitors.
It's our job to outwork them, outhustle them, out-innovate them.
8:35 a.m.: Ballmer on key competitors: Oracle and Google and VMware and Apple.
Ballmer: Also open-source stuff like Linux and Firefox.
8:36 a.m.: Mossberg is now asking Ozzie about syncing.
8:37 a.m.: This is turning out to be a softball for Ozzie to talk about Windows Live Sync.
8:38 a.m.: Hmmm. Instead Ozzie points to ActiveSync, Microsoft's mobile syncing software. Now talking broader about sync, saying it is a hard, but straightforward task.
8:39 a.m.: Ozzie decides to go broader with his answer: We're spreading our information all over the Web. We don't really have a conceptual model that is as clean in the past. He's talking more meta. A good point on how our data was once in files and folders, but now is more disparate...Clearly he's the tech guy and not the salesman.
8:40 a.m.: Now Ballmer talking about the challenges of sharing with person X, but not person Y.
8:42 a.m.: Ballmer likens some of today's identity and privacy issues to the discussions about cookies.
8:44 a.m.: Ballmer makes an interesting point about how Microsoft may have controversies about privacy, but its business model is about selling software and not monetizing data. "We have controversies, we have no business model dependent on it."
8:45 a.m.: Ballmer says the goal should be a transparent dialogue with the customer about privacy-related issues.
8:46 a.m.: Mossberg: Steve Jobs said that he thought we were on a course where fewer people will be using PCs and more people would be using tablets or smartphones or these other kinds of devices.
8:48 a.m.: Ballmer: "I think people are going to be using PCs in greater and greater numbers for many years to come. PCs will look different next year...they will get smaller and lighter." Some will have a keyboard, some won't. Some remote control, some touch powered.
The expected answer from Ballmer, for sure.
Ballmer: Nothing people do on a PC is going to get less relevant tomorrow.
8:49 a.m.: Ballmer points out that not everyone can afford five devices, like the folks attending D. He says he was just in India, where just getting one PC to be affordable enough remains a challenge.
8:50 a.m.: "Windows machines are not going to be trucks," he says, referring to Steve Jobs' comment that personal computers are going to be like trucks and tablets like cars. PCs, he said, "will continue to be the mass popularizer" of computing tasks.
Maybe there is a reason they call them Mack trucks, he says, making a nice pun.
8:51 a.m.: For those who missed it, Jobs said Tuesday night that trucks were the dominant vehicle in the agrarian day, but cars took over as folks shifted to cities.
8:52 a.m.: Ballmer points out that everyone's world view is skewed by what they make.
8:52 a.m.: Mossberg: Will you go back at the tablet market?
8:53 a.m.: Ballmer: there will be a range of devices over time that run Windows and don't have a keyboard.
8:54 a.m.: Ballmer: There are things where we are very well suited with where we are today. Some things that need optimization.
8:55 a.m.: (I think that's quite the understatement, when it comes to highly mobile devices, like tablets.)
Re: Android--Ballmer points out that a lot of early Netbooks ran Linux, but now most run Windows. (good point)
8:57 a.m.: Mossberg asks if Microsoft might do something like Media Center for a tablet that is optimized for consumption. (An interesting idea, doesn't get direct response.)
Mossberg again on tablets. Do you think this is a real deal this time?
8:58 a.m.: Ozzie: I don't know what the balance is. More people consume than create. There will be lots of simpler screens, living room screens, public screens. "This isn't science fiction anymore."
8:59 a.m.: Ozzie: Productivity and creation experiences are additive, the best ones gain new features. Consumption experiences, he said, are subtractive. The best experiences are where you can simplify, simplify, simplify.
9:01 a.m.: Ballmer: Are these really separate categories, No? iPads will look more like PCs. PCs will have potential to look more like iPads. "The race is on."
9:02 a.m.: Mossberg: Mobile is a huge thing. You just kind of shook some things. You are personally going to oversee phones.
Ballmer: There's not a layer of management between me and the phone team.
9:03 a.m.: Ballmer says Bach wanted to retire. The layering just doesn't make sense to re-create.
9:04 a.m.: Ballmer on phones: "We were ahead on this game. We are not ahead on this game. Now we find ourselves number five. We missed a whole cycle. We learned the value of excellent execution."
Me: When was Microsoft ahead on phones?
9:05 a.m.: Ballmer: The good news for Microsoft is that it is a very dynamic market. I think we've got some pretty good stuff coming.
9:09 a.m.: Ballmer, on Apple in the phone business: Apple's done a good job of coming from nowhere a few years ago. They have a following... They've done the best job on the browser.
Ozzie points out that over time, phone experiences will be less divergent than experiences on other devices.
9:11 a.m.: Mossberg: What about Google? Android has picked up a lot of momentum.
9:12 a.m.: Ballmer: On the phone, Android is certainly a real competitor...On the larger-screen devices, who knows. They've got to prove themselves in the market.
9:13 a.m.: Ballmer makes a dig at why Google has two operating systems.
We spend most of our time trying to get more coherence in our operating systems. Why would you start incoherent?
9:14 a.m.: Ozzie gives a much more direct answer. Android is a bet on the past. Chrome is a bet on the future.
Mossberg: See he gets it.
9:15 a.m.: Ballmer: Then why do two? Having two things is not an aid.
9:15 a.m.: Mossberg points out both Apple and Microsoft have separate PC and phone operating systems.
9:16 a.m.: Mossberg asks about search. Last year Microsoft announced Bing at D.
9:18 a.m.: Ballmer: We launched a year ago. We are the first search engine in a long time to gain market share. I'm not confused. It's a long game. Gone from about 8 percent market share to 11. If he wants to feel good, he thinks about it as 40 percent gain. But he also knows it's just 11 percent share. We've done a lot to establish brand. I think we've got a heck of a lot of work cut out of it against "a very large behemoth."
Ballmer: We're in it for the long run. Yahoo integration. Trying to get some integration. Quality is job one for us on that integration. It is a business where scale drives product improvement.
9:19 a.m.: We didn't have a Yahoo deal a year ago, Ballmer said.
9:23 a.m.: Now we're beginning audience questions. Is Apple right that users don't want a pen?
Ballmer: People want to take notes, annotate. A lot of people are going to want a stylus. Some want other modes. Our Windows team is driving that hard.
9:24 a.m.: Ballmer: People want to take things in the physical world, like pen and paper, and have technology-based way.
Ozzie: The software has not kept up with the capabilities of the device.
9:28 a.m.: An audience member asks about the China security thing. Ballmer: We all have to be vigilant as companies about protecting our intellectual borders. Regarding doing business in China, you have to either exit or follow the local laws or you put local employees in harm's way. "I'm not going to put people in harm's way."
9:30 a.m.: Ballmer says that the company's model of engagement is the best way to handle the situation. "I actually think that's the most constructive way." He points to a book he read about Apartheid and whether it was better to stay, go, or stay and be part of a reformation process. He argues that Microsoft is playing that last role in China. "I think it is the proper, right, principled stance to take."
9:31 a.m.: Ballmer's asked if he has any advice for Google on the antitrust front. Ballmer: "I wish them good luck getting lots of experience."
9:33 a.m.: Audience member: What do you want Microsoft's role to be in media (with MSN etc.)? Ballmer: Our main goal is providing tools for people to create content and then monetize that content.
9:34 a.m.: Also doing first- and third-person stuff for the Xbox, noting there will be some "media experiences" for Natal.
9:36 a.m.: Larry Magid asks about battery life. He says he has an iPad and a laptop, mainly because he is worried about battery life. (I just headed back to the press room because my Windows 7 laptop drained its battery in an hour of heavy use with a Sprint card). "You've highlighted an important area of opportunity," Ballmer said.
Ballmer says that better chips are coming, and Microsoft is also doing work that should allow it to be more competitive.
9:38 a.m.: On business models, Ballmer said Microsoft can't allow itself to be constrained to a traditional software-only model. He points to the Xbox as an example of doing things differently.
9:39 a.m.: The last question is on HTML5 vs. Silverlight. Will we see Silverlight on Android or iPhone?
9:40 a.m.: Regarding Silverlight on the iPhone, Ballmer says it doesn't run on the iPhone. "My guess is if it did it would be blocked."
9:40 a.m.: With that, Ballmer wrapped up.
9:42 a.m.: OK, folks, there's new guests on stage (the heads of Demand Media and ProPublica), so I am going to sign off. Thanks to Josh Lowensohn and Jen Guevin for helping make this possible and all of you for a great live discussion.
Editors' note: The initial, bare-bones version of this story was posted June 2 at 2:08 p.m. PDT.