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Steve Ballmer has told Microsoft partners not to fear a future where software is delivered as a service, even though some will end up as road kill in the migration online.

The chief executive told a worldwide partner conference in Houston, Texas that Microsoft can't give competitors the edge in cloud services. He said business models and software architectures must change for scale and availability, ads serving and service subscriptions.

It was a cold message of inevitability from a man who last year dismissed as "naive" those who believed software as a service (SaaS) would supplant client-based computing, while also calling those who dismissed online services as "troglodytes".

"I'm not going to tell you the world of the future looks exactly like the world of today. We all know that's not true," Ballmer said, recalling the ghosts of those who made a living integrating TCP/IP stacks a decade ago.

"There will be businesses that you're in today that won't exist 10 years from now because the technology will have advanced so far."

He noted businesses providing "cloud" based services from companies such as Microsoft would grow faster than those providing hosted versions of Microsoft's software. The upshot is Microsoft will end up competing with partners, as it has in other areas in the past.

Despite this, Ballmer said software plus services is not a world for partners that should be "scary, or problematic".

Microsoft is pushing "software plus services" to perpetuate the whole notion of Windows on the client, whereas the more popular SaaS concept talks of applications delivered using the browser.

"If you know Exchange, you know Exchange, and those skills and technologies, they will translate as we move from the server to the cloud. Building SharePoint apps today? Great, we're going to take you with us into the world of software plus services. Same thing with Dynamics," Ballmer said.

According to Ballmer, Microsoft will launch a "platform for the internet cloud" that'll let partners write, deploy and manage programs and that will provide computation, storage and management. He highlighted SQL Server Data Services, federation using Live ID and Active Directory and something he called "Windows in the cloud".

"We're not getting rid of servers. We're extending the basic programming model and management model that we know today from Windows and Windows Server to the cloud."

Ballmer also talked up opportunities at the server infrastructure layer. Stressing opportunities in virtualization with Microsoft’s Hyper-V hypervisor as a means to manage Windows servers in the cloud, Ballmer said: “It's game time for us in virtualization”.

He wasn’t kidding. Barely 24 hours ago, his biggest competitor VMware potentially weakened itself by kicking out techie chief executive and president Diane Greene following a game of corporate politics by Joe Tucci, the chief executive of VMware's storage parent EMC. Green was replaced by Paul Martiz, Microsoft’s former group vice president of platform strategy who left Redmond in 2000.

The news came as Microsoft finally made Hyper-V available through the Windows Update service. Hyper-V had previously been available as a separate download to its server.®

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