Live blog: Ballmer on the cloud

With Google ready to declare the desktop dead in three years' time, Microsoft CEO Steve Ballmer is set to give a speech Thursday on his vision of the future of computing and where the cloud fits into things.

The speech is being broadcast over the Internet at 10 a.m. PST and we'll be covering it live as well.

I've also embedded the live speech below (Silverlight required). But don't forget to hit reload to get my updates.

10:00 a.m. PT:
Waiting for Ballmer. Microsoft has shown live video of the crowd and what looks to be a Windows Azure container that it brought to the event, which is being held at the University of Washington.

10:05 a.m. PT:
Event is kicking off. University of Washington president is on stage, talking about longstanding relationship with Microsoft that dates back to when "Paul and Bill snuck on campus to steal computer time." These days, Microsoft has its own computers, but UW sends about 100 graduates a year to work at the software maker.

10:06 a.m. PT:
Ballmer takes the stage. There's some weird irony to me. Notes he travels to universities all over the world, including Budapest, where they threw eggs at him, but this is the first time he has spoken at the hometown university. (Update 11:50 p.m. PT -- It looks like he has spoken at UW, most recently in 2007. But I guess he hasn't spoken at the Allen Center there, so maybe that is the irony he was referring to.)

10:08 a.m. PT:
The Internet is the gift that keeps on giving, Ballmer said. "Today I want to talk about the cloud," which he said is the latest evolution of that gift.

10:10 a.m. PT:
The browser, free e-mail, and search all changed the Internet and the cloud is just the latest evolution of that. Ballmer notes that Ray Ozzie's memo on the importance of the cloud is now five years old and there is still a lot of unfinished promise.

Now showing video of University of Washington students being asked about the cloud. The ones on camera don't seem to know. Guess they won't be part of those 100 students a year hired by Microsoft.

Video ends with UW football coach explaining what the cloud actually is.

10:14 a.m. PT:
I don't know if we are always going to be talking about the cloud as a term, Ballmer notes, but the concept, he said is something "we're betting our company on."

10:15 a.m. PT:
Ballmer says he will ouline five principles of the cloud. No. 1 The cloud creates opportunities and responsibilities. Ballmer notes what I would have said, that just sounds like a lot of "blah, blah, blah."

Responsibilities like privacy, etc. that are both technical and social issues.

10:18 a.m. PT:
Ballmer also talks about the challenges of monetizing content creation. He gives props to that App store, mentions you can put up a Web page and include Google AdSense ads, but suggests there is more, then shifts talk back to privacy and anonymity.

"We think as a big company, we've gpt to lead on privacy," Ballmer said. For the creator to build strong infrastructure, need a lot of commercial players in areas like payments, infrastructure, identity, etc.

10:22 a.m. PT:
Principle No. 2: The cloud helps you learn and take action.

Ballmer gives his personal example of trying to find out more about health care to be more informed about reform debate. He said using any search engine it was easy to find a sea of information but hard to find the data he was looking for.

More talk about "10 blue links" as state of search. It's Microsoft's favorite line of how it can still beat Google.

The thing is, both companies are moving away from 10 blue links. The question, to me, is how can Microsoft or anyone else leapfrog Google rather than just offer easily matched incremental advances. Google surpasses Yahoo as the most popular search engine not by being a little better, but by being significantly better.

10:25 a.m. PT:
Demo of latest version of Bing Maps by Microsoft's Blaise Aguera y Arcas. He talks about maps not just as an entity, but a way to view all manner of information.

10:30 a.m. PT:
The demo is still going on. Meanwhile, I think this Microsoft site is new, with a new motto, noting that Microsoft is "all in" on the cloud. The site notes how all of Microsoft's key products--Windows, SQL, office and Exchange--are moving into the cloud.

There is no doubt in my mind Microsoft is moving that way. One of the key questions, though, is whether it can get the same value for those products in a cloud-based world.

10:35 a.m. PT:
Aguera y Arcas is showing some of the apps being built on top of Bing Maps, everything from a real-time telescope view to down-to-earth applications like showing what businesses and services are nearby a particular place. Now back to Ballmer.

Ballmer rolls out dimension No. 3 on his list of five. The cloud enhances personal and professional interaction. Again, Ballmer says what I would have said. That's obvious and happening already.

But, there's more, of course. The cloud, he says, is what will let people pull things together how and the way we want to. Bring together things like contacts and calendar in the context of whatever we are doing.

This is a subtle point Ballmer I think is making. Think about it--Email is an example of static, largely context unaware application. It looks the same to the recipient whether it is sent from a phone, on a plane with Wi-Fi or at an office desk. But other communications are emerging that are based on the context of where the participants are. Examples of this include the integration of location and presence into communications systems.

10:43 a.m. PT:
Another demo, this time of how Xbox can be used in UK to share the TV-watching experience via work Microsoft has done with content provider Sky.

You can share live TV with Xbox Live friends online. I've heard about this a bunch, but have yet to be convinced that TV is a social experience beyond those physically in the same place. Maybe sports, but in general, I like to watch TV with at most one or two other people. The demo sounds more like watching a movie in a very noisy theater to me.

10:50 a.m. PT:
Microsoft demo guy is doing a valiant job of trying to cover as the video is taking forever to load (it is synching with the UK).

10:52 a.m. PT:
Dimension No. 4 cloud wants smarter devices. This isn't to say we are not going to do a lot of work on browsers and standards. "The devices you use do matter."

This is really the key question for Microsoft, particularly on the desktop side. I don't believe the desktop device is going away. Nor do I really think Google does either--if they did there wouldn't be a Chrome OS, in addition to Android.

The question is what is the future of the client experience. If it is just a gateway to the Web, then it probably won't have the percentage of value that Windows has enjoyed on the PC.

The phone is actually a great example of this. All these apps prove there is a rich demand for local experiences, if they do something that a generic cloud hookup cannot.

Ballmer says this is what Microsoft is trying to do with Windows. I'm interested to see what Microsoft can do in this area--and how quickly. Historically, Microsoft has had a hard time making significant changes to Windows in a quick time frame.

Now he's talking Windows Phone 7 Series a bit...

10:57 a.m. PT:
Finally, the fifth dimension. Something about how the cloud drives server innovation, which in turn drives the cloud. Not quite sure what Ballmer means about this.

11:01 a.m. PT:
OK, sounds like he's talking about the difference between the server architecture of the cloud, versus traditional client-server. Virtualization, he said, was just a bridge to get a little more utility out of the old architecture. What's really needed is new type of application design, i.e. Windows Azure.

11:05 a.m. PT:
Microsoft is shifting a lot of its work--90 percent--across the company to the cloud. It's about 70 percent now and will be 90 percent of effort in a year's time. Windows development, he said, had some non-cloud work to do (read moving beyond Vista) but now it too is focused on how can it be a good cloud client.

Ballmer notes that shifts in computing tend to come every 10 years are so. "Those are interesting times," Ballmer said.

"For the cloud, we're all in."

11:09 a.m. PT:
Done with speech. On to Q and A.

11:15 a.m. PT:
Ballmer talks a little bit about difference between the approach of Microsoft versus that taken by Apple and RIM. "You get exactly what they choose to build for you." He says on the phone, Microsoft wants some choice, but perhaps not as much as it gave in the past with Windows Mobile. On the PC, he said, there is room for even more shapes and sizes. "The PC form factor is not a static thing," he said.

11:20 a.m. PT:
Taking a step back, there wasn't a lot new in Ballmer's speech as far as products, but the tone of the message really is different. In the past, Microsoft talked about on-premise as equally important as what is going on in the cloud, as evidenced by its "Software plus Services" mantra. Today, it's "Cloud: We're all in."