What Will a Microsoft Services Model Look Like?

Addressing their Partner conference in Denver yesterday, Steve Balmer of Microsoft walked a tightrope, trying to energize partners to continue to aggressively support sales of Vista and Office 2007, while offering glimpses into a more Web-centric future.

He has to do both.  No one can walk away from the billions of dollars of revenue Windows and Office generate without a strong, in-place, new plan, already successfully executing, to replace them.  Microsoft isn't ready for that.

On the other hand, partners are clearly concerned about making more investments in the current Microsoft model while they watch the new Web 2.0 model take root (and perhaps take over). 

So Balmer has promised them tools by year-end to permit them to build on top of a Microsoft Services model, based on .Net.  Not clear is just how much it will depend on Microsoft services based in the cloud and just how much desktop and server software will still be required.

A good overview of Balmer's speech is in Mary Jo Foley's blog at http://blogs.zdnet.com/microsoft/?p=567&tag=nl.e539.

More interesting is the hint that Microsoft is going to offer a web-based collaboration and communication service based on the custom application it created for Energizer, plus the notion that partners could create differentiated offerings of their own on top of Microsoft's offering.