Media Money with Julia Boorstin

Microsoft's Ballmer Talks Up Cloud Products to Partners

Today, Microsoft is kicking off its annual event to 15,000 people integral to its business—the partners who sell its products and build software on top of them.

Steve Ballmer
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Microsoft has a lot going on between new cloud products, growing competition, and its Skype acquisition, and now it faces the challenge of getting its partners on board for its next steps.

Microsoft's cloud strategy is front and center with the recent launch of cloud-based Office 365 and its Windows Azure Cloud Platform. Steve Ballmer kicked off his speech saying "we're all in" when it comes to the cloud—the cloud is "a disrupter" but it's "where things are going.

Microsoft's partners have raised concerns that cloud services can be easily sold directly to consumers, which can cut into their revenue. Ballmer admitted partners will have to change the way they do business with cloud products, but didn't question that partners will play a vital role.

This week's event comes as Microsoft faces growing competition in the cloud space, from Salesforce , RedHat , VMWare , and now Google .

Ballmer had plenty of other issues to address—he acknowledged the huge amount of competition for Windows and drew laughs when he acknowledged missteps with its phones; "we've gone from "very small to very small." But he said "we're all in with phones," with the "Mango" update coming later this fall.

As to the company's pending $8.5 billion Skype acquisition, Ballmer says it's key to the company's goal of helping customers communicate and connect, and will be integrated into its Lync product.

Despite the hope that Ballmer would make some announcements about Windows 8, they didn't reveal any details, just stressed the success of Windows 7, and "re-capped" everything they've already announced.

Ballmer spoke big picture about how this is a turning point for technology and Microsoft—everything is now re-orienting around the "social graph." And with Microsoft's partnership with Facebook (and its investment in the social network), Ballmer says that Microsoft is ahead of that curve.

A demo of Bing search engine showed your integration of users social network helped prioritize results. In entertainment, Ballmer's all about making things easier: voice control for the XBox and Live TV for the XBox before the end of the year. (Microsoft offers this through BSkyB in the UK).

And to help you navigate around the millions of pieces of content, Ballmer announced voice-controlled Bing (with its social integration) is coming to the XBox.

But this audience probably cares more about the products they're selling—Windows Server and Azure. Ballmer says the company's advantage is that it spans the public crowd and the private cloud, which he says is an advantage.

He pointed to a few examples of how companies are using its cloud products, citing Boeing marketing its 737 with Windows Azure, and how American Airlines will update its Windows Phone app to deliver the fastest-ever flight info.

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