Another take on the recent Ray Ozzie interview -- more useful insights from Nicholas Carr
Here we see the very real dilemma that Microsoft finds itself in today. To maintain its growth and profits, it has to focus for the time being on promoting the new versions of Office and Windows, even though they are, by Ozzie's own implication, relics of the past - "artifacts of a time when we were not fully connected." If the company were to excitedly "talk about how to change the game," through offering software more as a set of services deployed centrally, it would trample on the Office and Vista sales pitches. Who wants to buy relics of the past?
I see mostly upside potential for Microsoft, in the software + services future. Yes, there will be some opportunity cost issues, e.g., with some small- to medium-sized organizations opting for Exchange/SharePoint/etc. in software-as-a-service (SaaS) mode instead of tradional, on-premises software products, but that's going to happen with or without Microsoft's direct participation in the SaaS space, so it's wise of Microsoft to get there proactively -- and the revenue/profit potential may actually be greater than Microsoft's more traditional independent software vendor value proposition, for many market segments/scenarios.
I also think Microsoft's "relics of the past" have a lot of remaining mileage -- it'd be a different story, perhaps, if Microsoft weren't continuing to invest in substantive innovation such as the Fluent UX and deep XML Schema/web services/etc. support in Office, but, as long as Microsoft continues to innovate in meaningful ways, I don't see the end of the desktop as we know it "real soon now".