The so-called PAAS arena

In the so-called PAAS arena, Ballmer credited Amazon Web Services with getting a nice jump on the rest of the market. Nevertheless, it will take a lot of years for clients to move their line of business apps to the cloud. Microsoft, with its virtualization research and private cloud/public cloud, is so then positioned to compete with Amazon, VMware and others in the space, he added.

The mobile market

Turning to the mobile market, Ballmer said Microsoft is working hard with hardware makers to make phones, tablets, convertible computers and other devices based on Windows 8. Microsoft will support touch, natural user interface and speech on Nokia devices. Nevertheless, Microsoft has no plans to build its own phones or tablets, preferring to "enable hardware research," he said.

The conversation got livelier when Battelle asked Ballmer to sell him on why he should buy an Windows Phone instead of an iPhone. Ballmer said this holiday season there will be attractive Windows Phones and iPhones for consumers, nevertheless that consumers may prefer the Windows Phone 7 experience of having Bing search and social contacts front and center on the phone to put it more exactly than seas of icons and "blah, blah, blah" consumers have to wade through.

The audience laughed

The audience laughed. "Bing is there to help you get things done," Ballmer said, adding that during Apple has done nice things with Siri in its new iPhone 4S, Microsoft has been doing some of the speech recognition and natural language processing stuff for years with TellMe. This is only in part true. No other company has combined natural language processing with context the way Siri has.

Battelle at the time put the same question to Ballmer, however with an Android smartphone subbing for the iPhone. Ballmer said: "You don't need to be a computer scientist to use a Windows phone, yet I think you do to use an Android phone."