Steve Ballmer and Ray Ozzie, Microsoft's chief executive and chief software architect, have been expounding on the current state of play in the IT market at the All Things Digital conference in Los Angeles.
The executives were adamant that Microsoft's future is working with the cloud, and that the transition represents moving from a computing world that is good for the company to an environment that could be much better.
Ballmer acknowledged that this would lead to new competitors, but that Microsoft had faced a similar challenges from Linux and OpenOffice 10 years ago and is still prospering. He identified Google, Apple, Oracle and VMware as the key competition as well.
"So now we've got new competition in some areas where we've been strong. It's our job to out-work them, out-innovate them and out-hustle them and go get our job done, and we've got good competition," he said.
Ozzie was more taken with the opportunities in the cloud for managing client synchronisation. People want an appliance, be it a tablet or whatever, to come out of the box, connect to an application online and have cached data downloaded to customise the device, he said.
There was much debate about Apple and the impact of the iPad. All Things Digital's Walt Mossberg, who chaired the session, asked whether Ballmer and Ozzie consider the iPad as a PC. Ballmer suggested that it is a PC, but has serious limitations, such as taking notes as he saw one attendee trying to do the day before.
While Microsoft will be on tablet devices in the future, Ballmer said that he expects PC use to carry on growing, and that general purpose devices with serious graphics and storage hardware will remain the norm.
Ballmer was dismissive of the Mac platform, saying that Apple had had a great last quarter but that its market share is still "minimal" and not growing.
Ozzie felt that a number of form factors will emerge, including the tablet, a smaller handheld pad and a variety of other designs.
However, there are key differences in how people use devices for consumption and data generation, and a successful device will need to address both areas.
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