Author: TheAppleBlog.com

Smartphone owners are more interested in receiving coupons on their handsets than getting other kinds of mobile come-ons, according to figures released today by Compete.com. It’s just the latest evidence that while mobile advertising as a whole is slowly gaining traction, mobile coupons may be about to take off in a big way.

Compete found that grocery coupons were the most attractive of 10 types of mobile marketing ploys, with 36 percent of U.S. smartphone owners saying there were interested in receiving the discount offers on their handsets. Twenty-nine percent said they wanted to scan barcodes with their phones, while only 15 percent were interested in receiving text message ads.

Interestingly, Compete’s findings come just days after the launch of what may be the nation’s biggest mobile-coupon campaign: Target this week began delivering mobile coupons that can be scanned at the retail counter. Consumers can visit the retailer’s mobile web site or text the word COUPONS to the short code 827438 (TARGET) to opt in and receive a link to a mobile web page containing multiple offers accessible through a single barcode.

Mobile coupons have been around for the better part of a decade but have failed to really take off thanks to a lack of widespread retail support and a user experience that is often intolerable. The market is positioned to pick up some serious momentum in the next few years, though, according to a recent report from Juniper Research, which expects it to exceed 300 million people worldwide by 2014. That forecast might look modest if Target’s campaign gets legs and other nationwide retailers follow suit.

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Image courtesy Flickr user Joe Pemberton.

Vodafone has shuttered Wayfinder — just 16 months after spending $30 million to acquire the Swedish navigational software firm. The move underscores just how drastically the mobile navigation market has changed in the last year thanks to the emergence of free services from third-party developers. It’s also a sign that U.S. operators won’t be able to continue charging customers extra for navigation for much longer.

Navigation has been a lucrative space for carriers such as Verizon Wireless and Sprint, both of whom continue to offer GPS-based services for $3 a day or $10 a month. Vodafone had acquired Wayfinder in an effort to create a suite of new location-based services and keep pace with third-party developers such as Google and Nokia.

But both Google and Nokia have made their offerings free in the last few months, giving consumers turn-by-turn directions and other goodies for no charge beyond the cost of mobile data. So Vodafone will ditch its effort to develop its own products and look to partner with third parties for location services that it can offer for free. And that’s a clear indication that U.S. carriers looking to monetize their branded navigation services will have to find a way to do it without dinging their customers for additional monthly charges.

Image courtesy Flickr user KhE 龙.

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It’s a little after 6 a.m. Eastern on Friday, March 12 as I write this post. Some two hours from now, the Apple Store will officially take orders for all iPad models, apparently with the ability to specify pickup at a local store. The store is currently down, though it wasn’t the last time I checked about an hour ago. (Trust me, I’m not awake in anticipation of buying an iPad; my work has me on an early-to-bed, early-to-rise schedule.)

Like I have with most watershed Apple products of the last decade or more, I’ll order an iPad on the day they become available. For me, this has included, but is probably not limited to, the original iMac, iBook, Airport (gray UFO!) and 5GB clickwheel iPod, and more recently the MacBook Pro, Time Capsule, MacBook Air, and of course, gen 1, 2, and 3 iPhones. Yes, yes, I’m a fanboy, but this is also part of what I do for a living.

You know by now that there are six models of the iPad, three with Wi-Fi only, three with Wi-Fi and 3G data access with the same 16GB, 32GB, and 64GB storage capacities in each model. For the sake of discussion, I’ll call them the iPad Wi-Fi and the iPad 3G, even though the 3G model also has Wi-Fi. The iPad Wi-Fi will ship on April 3, with the 3G model due some 1-2 months later. The iPad 3G carries a $130 premium over the iPad Wi-Fi across the lineup to account for costs related to the 3G access, such as a modem and antenna. Other than providing an additional type of Internet access, there don’t appear to be any differences between the iPad Wi-fi and the iPad 3G.

I’ll be ordering the top-of-the-line 64GB iPad 3G, the most expensive of the six models, but the one with the most storage capacity and both ways to connect. Why get the most expensive model when a cheaper one could suffice? Here are my key reasons:

• Storage Capacity: I’m really looking forward to iWork on the iPad, and these files will eat up precious space on the device. I use all three apps in the suite — Pages, Keynote and Numbers — on a daily basis, and I can’t wait to try them out on the iPad. Phil’s demo looked great. I’m also doing a lot of work in Internet video these days. Having video files on the hard drive that haven’t yet or won’t be encoded for Internet delivery will be very useful.
• 3G: My second favorite feature of the iPad (behind the keyboard dock) is the 3G data plans. At only $30 for an all-you-can-eat buffet of Internet bandwidth, the AT&T plan is a great deal (note that I haven’t had 3G call, connection and speed issues like many have reported). But the fact that you pay as you go and turn on and off the service from the device is killer. Say you don’t have it turned on but find yourself in a location without Wi-Fi; simply turn it on for a month, then turn it off when you’re done. Sure you pay a hefty price for a day or even a week of usage, but if you don’t use it again for a few months, you don’t pay for it. No-contract unlimited 3G Internet is a killer feature.

I expect to use my iPad extensively for client presentations. I use my MacBook Air today, and while effective for presenting to two to three people, I can imaging the iPad as an easel position will be much more elegant and effective. I also plan to use it for note-taking when I conduct usability tests. Using Numbers, I’ll be able to create input screens ahead of time based on the test plan, and quickly and easily capture data about each test and participant. The data will already be compiled, collated and ready for analysis as soon as test sessions are completed.

These are just a few of the uses for the iPad I have in mind, but the possibilities are limitless. I’d rather have the most capable model so I’m prepared for whatever opportunity arises.

Microsoft faces a tough assignment in trying to get back in the smartphone game. Nokia’s Symbian maintains a massive presence in overseas markets, while Apple’s iPhone and Google’s Android have gained tremendous momentum in the superphone era. And Windows Mobile will only continue to lose ground in advance of the debut of Windows Phone later this year thanks to the fact that the two platforms will be incompatible.

But there’s no shortage of players hoping that Redmond can breathe new life into its mobile business. The following are just a few of the entities with a vested interest in seeing Windows Phone succeed:

• Corporate IT departments — Business users are increasingly turning to consumer-friendly smartphones like the iPhone and forcing IT staffers to support their new gadgets. But the emergence of a phone that offers both Microsoft’s seamless integration with Exchange Server and consumer-friendly features and applications would go a long way toward making life easier for IT workers.
• HTC – The Taiwan-based handset manufacturer is fully aboard the Android bandwagon, but hitching your wagon to a single OS is a dangerous strategy for a mobile OEM. So the longtime Windows Mobile supplier is one of the launch partners for Windows Phone and vows to develop an “HTC Hub” for the platform.
• Motorola — Although it joined the Android crowd late last year in a big way, releasing both the Cliq and the Droid, as Om noted in January, Motorola was left out in the cold when HTC was tapped to produce Google’s flagship device. The struggling company will continue to churn out Android handsets, but Windows Phone has caught its eye. Look for increasing interest — and maybe a hardware commitment — out of Motorola as the OS nears its launch later this year.
• Application developers — Microsoft is wooing developers by forcing manufacturers to comply with strict guidelines regarding screen sizes, buttons and features. That will make it easier for developers to deploy apps across a range of Windows Phone gadgets without having to tweak each app for each handset. And longtime Windows Mobile developers are sure to be pleased by a platform that combines high-tech entertainment features with Microsoft’s business-focused technology.
• Gamers — Integrating Windows Phone with Xbox and Windows is an interesting move for a company whose mobile strategy has long focused on the enterprise. But it’s also a strategy that could finally push mobile gaming beyond casual, pick-up-and-play titles and toward more immersive, console-type experiences.

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I first used Fluid, the site-specific browser creation tool for Mac OS X, a long time ago. But I didn’t find it compelling enough to integrate it into my daily life, in part because virtually all of my digital life still lived on the desktop. As I personally moved more and more to the cloud, it became key.

I tend to use Fluid apps for things that I want to have open and at the ready all day. These are things I consider to be more like apps than websites, so having a separate window makes sense, if for no other reason than I can easily command-tab among applications by selecting the appropriate high-resolution logo. With Safari, Chrome and Firefox, I’m in and out of a lot of websites throughout the work day, but most are content sites, or web applications that I use once per week or less. Here are a few of the key ways I’m using Fluid today.

Google Calendar

I long ago tired of problems with invitations in iCal. There were just too many frustrating examples of invitations not coming through properly or at all, and I invested the maximum amount of time I was willing to solve it. Last year, I also tired of Mail.app’s performance when dealing with many accounts and large numbers of messages. I was using Google Apps for several accounts with IMAP enabled, and using Mail.app as my client. Since they were all Google accounts anyway, I made the decision to switch to Mailplane, which performs flawlessly and had the added benefit of saving a lot of precious space on my MacBook Air’s hard drive.

Then I started noticing how good email invitations looked in the Gmail interface, and how easy it was to add them to the Google Calendar associated with that account. It just worked. But I also have several calendars. So I decided to make one Google Calendar account my main or master account, and shared all my other accounts with it, with full read and write permissions. Then I created a Fluid app for that Google Calendar account. I now have one Fluid app called gCal that holds my various calendars in one view, and I turned on Google Mobile Sync for them all, so I immediately get changes on my iPhone and vice versa.

Pandora

Pandora has become my music source of choice while working. I’ve got several stations queued up, including Wilco, Spoon, Ben Harper, and Res, among others. I haven’t really tracked it, but I don’t think I come close to Pandora’s maximum of 40 hours of listening per month. If I exceed that, I’ll need to look into a paid Pandora One account, which has its own player download. In the meantime, I’m quite content to load Pandora in a Fluid app, start it up, and hide the window from view until I need to click the button that says I’m still listening. Again, having it in a separate window that I can hide from view while still using Safari is a huge win for me.

Facebook

There’s not much I need to say about Facebook, which has taken the world by storm. But I am now syncing my contacts with Facebook via their iPhone app, which I love because it’s the easiest and best way to have friend’s pictures show when they call. I once suffered from Facebook Fatigue, but I’ve gotten past that and now use it as an essential communications tool for certain contacts. I’m just starting to use it for some serious social marketing for my projects, and having it open in its own window makes it easier to keep abreast of messages and other updates.

WordPress

Finally, TheAppleBlog is hosted on WordPress, so I created a Fluid app specifically for creating posts like these. I’m also finding it more and more useful to tap out ideas that pop into my head and create rough outlines while the ideas are fresh, and save them as drafts. Then, when I have dedicated time later in the day or week, I can spend more time working on the posts.

Are you using Fluid in your daily Mac experience? If so, how do you use it? If not, why?

CA said today it’s agreed to buy privately held Nimsoft, which makes performance and availability monitoring software, in an all-cash transaction valued at $350 million. According to CA, Nimsoft will help it better serve “emerging enterprises” (read smaller businesses) adopting cloud computing solutions.

According to a statement from CA:

“CA estimates that emerging enterprises, which it categorizes as organizations with annual revenues from $300 million to $2 billion, will account for approximately a quarter of the software spending in CA’s market space by 2013.  By leveraging Nimsoft’s market expertise and technology, CA expects to add an entirely new set of customers to its base, which historically has been comprised of large enterprises.”

Chris O’Malley, CA’s executive VP of cloud products and solutions, added that Nimsoft could also help CA focus on “emerging national economies,” and opportunities outside the U.S. In a blog post, Nimsoft CEO Gary Read said he was initially hesitant to open talks with CA, but eventually became convinced that a deal could help scale Nimsoft’s business to keep up with growth in cloud computing. Many of Nimsoft’s customers are smaller companies.

In addition to providing more evidence that M&A activity is on the rise, CA’s Nimsoft purchase is just the latest in a string of cloud-focused acquisitions the company has made, including NetQoS (performance and app monitoring), Oblicore (dashboard monitoring services), Cassatt (automating cloud app scalability) and 3Tera (infrastructure management). CA is clearly diversifying into very diverse kinds of cloud-focused applications and services.

As Derrick Harris has pointed out, the company formerly named Computer Associates wants to be the enterprise watchdog in the cloud, providing end-to-end services and tools to IT departments. Its latest acquisition makes clear that the company also wants to extend that focus to smaller companies, and extend it overseas.

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Verizon Wireless is trying to cash in on AT&T’s latest toy. Calling Apple’s iPad “an opportunity for VZW,” the nation’s largest carrier in a memo obtained by Engadget is coaching its sales staffers to encourage customers to pick up the much-hyped tablet but skip the 3G option and connect it to Verizon’s network with the $100 MiFi.

At first glance, it’s a compelling pitch. Consumers can save $130 on the iPad by forgoing AT&T’s troubled cellular network, and high-powered users might be swayed by the fact that the MiFi can power up to five gadgets simultaneously. But the MiFi is packaged with a 5GB data plan that costs $60 a month, while AT&T offers its unlimited iPad data service for only $30. Regardless, though, the effort is a timely reminder that with its MiFi Verizon be well-positioned to leverage the flood of iPad-like devices slated to come to market later this year — even if those gadgets aren’t actually sold by Verizon.

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Image courtesy Flickr user nDevilTV.

The rumors of Adobe being bought by Apple come up every so often. Apple could easily afford such a purchase and the results would be interesting. I would love to see Adobe restructured by a company like Apple. Adobe has many applications that are the gold standard but it seems to lack focus. These are my thoughts on what Apple could do with Adobe’s biggest apps and make everyone’s life a lot easier.

Video

Adobe’s video market could be trimmed down. Anything that can already be done in Final Cut Studio should be gone, including Premiere and Soundbooth. I’m not sure if After Effects would even be worth it in the end. Most believe that Final Cut is a very nice video suite on the Mac platform and in the PC world, AVID holds the crown. Why is a program like Premiere needed? It’s not quite AVID but way better than Windows Movie Maker. Now throw Sony Vegas in there and it’s starting to get crowded. Apple could create Final Cut for the PC or forget about them altogether. This would come down to money in the long run. I personally don’t think Apple needs to worry about the PC side unless they are going to legitimately compete against AVID for dominance.

Design

Photoshop and Illustrator go hand in hand with Apple. The general public thinks of Apple when Photoshop is mentioned and vice versa. This is known as one of Apple’s strongest markets. Most believe that these design apps run better on a Mac but as we know, Adobe is slow in keeping these flagship apps on the cutting edge. Apple could force them to be designed for the latest and greatest environments. While they’re at it, stop releasing new versions every year that don’t have any significant improvements. Adobe needs the money to keep rolling in through yearly revisions but Apple wouldn’t have this problem. Make a new version when real features are created. In an educational environment, we are forced to upgrade every year because the textbooks only cover the newest versions. This puts a large strain on software budgets.

Documents

Acrobat should also be restructured and brought back to its core purpose. Every other week we hear of an exploit in PDF’s and it’s because they don’t do the simple task they were conceived to do. Strip out all the extra junk and just make PDF’s do what they need to do. Reader should be killed for the Mac OS also, Preview is way quicker and does the job just fine.

Flash

Then there’s the elephant in the room, Flash. Oh my dear old friend, you were once so cool. Animations, games, crazy navigation menus and long site intros were such a treat. Now I have grown bored with you.

The problem is that Flash is so ubiquitous with the web that it can’t just be tossed out into the street. Apple would need to clean it up significantly and keep it around until HTML5 took over. They should only provide security fixes but no new features. This would allow it a peaceful death.

Adobe has so many products that it’s kind of ridiculous. Most of them could either be worked into existing Apple products or forgotten forever. If Apple did purchase Adobe, what about the PC side of Adobe’s business? They would have to crunch the numbers to see what products are worth the extra cost of development, but Apple could really limit what’s available for Windows. Whether that would that be a good or bad thing, I’m not really sure. In Apple’s mind, if it sells more Macs then it’s worth doing.

I believe Apple could really improve Adobe’s products and make them more reliable than they ever have been. It would end the grudge that they have against each other and hopefully get applications like Acrobat and Flash back to their roots. Adding useless features just to sell a different version every year will not win you any fans. Make it a worthwhile upgrade or inexpensive and I will gladly support you.

Cisco has unveiled a new routing system that it claims can handle 12 times the traffic capacity of the nearest competing system. And it’s all about the video.

The company in a much-hyped announcement this morning introduced the CRS-3, a router that can move up to 322 terabits per second — enough to download the entire printed collection of the Library of Congress in one second, Cisco said, or deliver all movies ever made in about four minutes. The router has been tested by AT&T (s t) in a successful trial of 100-Gigabit backbone network technology. Cisco said it has invested $1.6 billion to develop the hardware, which starts at $90,000 and is slated to be available in the third quarter of this year.

“This is about laying the foundation for the next generation internet,” said Pankaj Patel, SVP and general manager of Cisco’s Service Provider Group, during a webcast. “It’s about scale.”

Cisco believes that kind of muscle will be necessary to support a dramatic surge in data consumption on fixed-line and mobile networks over the next several years. And the company is betting heavily that both consumer and enterprise video will drive a huge amount of that growth, as its $3 billion acquisition of Tandberg illustrates.

“Video is not just the killer app,” Cisco CEO John Chambers said. “It enables new business models, new health care models, new productivity models.”

Chambers also said Cisco is expanding beyond its role as “a plumber” to become a business partner and consultant for businesses looking to leverage new technologies. That’s a strategy that could pay big dividends as vertical markets such as health care and education increasingly look for ways to use technology to connect with their customers and with each other. And the move is likely to help Cisco maintain its edge in its two core businesses — routers and switches — that appears to have slipped slightly.

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Thumbnail image courtesy of Cisco

Apple has secured a patent for a system that would enable consumers to use an electronic gadget — say, um, an iPhone — in place of keys to unlock their cars and front doors. It’s an effort that could finally move the needle for the short-range wireless connectivity technology known as near field communication.

As first reported by the Daily Telegraph, Apple would allow users to enter a PIN code and wave the phone over an electronic pad fitted to a door. The system would be based on NFC, which has long been envisioned (and trialed) as a technology that could power retail transactions but has so far failed to gain any real traction — due at least in part to the fact that consumers don’t see much additional value in using their phones instead of their credit cards to make payments. But replacing keychains with phones could be a very attractive proposition for consumers — and as such could encourage handset makers to finally add the technology to their devices.

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Image courtesy Flickr user BlakJakDavy.

Carriers are swapping mobile search partners in an effort to better monetize users looking for content on the wireless web. The latest round of deals could help knock Google, which currently dominates mobile search, off its perch.

T-Mobile USA recently bumped Yahoo in favor of Google as the default search engine on its handsets, ending a year-old agreement that saw Yahoo power search on the carrier’s Web2Go service. (Yahoo said that it will continue to deliver content for Web2Go.) The move came just days after AT&T said it had tapped Yahoo for search on its new Motorola Backflip, marking the first time Google’s search offering was replaced on an Android handset. And it follows Verizon Wireless’s decision last fall to make Bing the default search provider on BlackBerry handsets, replacing options including Google and Wikipedia.

The recent round of partner-swapping among carriers and mobile search providers may seem trivial in light of all the recent attention focused on downloadable search applications, but the tie-ups could significantly impact the space over the next few years. While smartphone users always have the option of typing in a URL or firing up a search app, casual users will typically settle for the default engine on a mobile browser. That doesn’t bode well for Google, which could see its search engine get bumped from its own Android platform if other carriers follow AT&T’s lead. Google continues to dominate mobile search, accounting for more than 9 percent of all page views on the mobile web in January, according to the admittedly small sample of Opera Software users, and comScore reported last August that more than half of all mobile search users said they used Google. But that dominance will be threatened as carriers opt for other partners to direct users on the mobile web.

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Image courtesy Flickr user g.orginals.

Big In Japan, which has built an impressive lead in mobile barcode reading, today announced the acquisition of Snappr, a pioneer in the space but nonetheless one that has failed to gain much traction and floundered late last year. It’s a move that could go a long way toward finally moving the needle for quick response (QR) codes in the U.S.

Big In Japan already boasts a huge hit with its ShopSavvy app, which enables users to scan traditional UPC barcodes to receive product and pricing information from online and local retailers. ShopSavvy was an early hit on Android before coming to the iPhone in November; more than 1 million Americans use ShopSavvy to scan upwards of 1 billion barcodes each day, according to the developer.

A San Francisco-based startup, Snappr built its business on technology that reads QR codes — those odd-looking squares that can store far more information than traditional barcodes. QR codes have gained substantial traction among mobile users in some overseas markets as an interactive advertising tool, among other things, but have yet to gain much momentum in the U.S. Google is hoping to change that by making QR codes the foundation of its Favorite Places, a Yelp-type offering that distributes unique codes to businesses for consumers to scan.

Big In Japan said it will integrate Snappr’s technology into ShopSavvy, enabling the app to read both UPC codes and QR codes. The company hopes to attract the attention not just of consumers, but also of brands, which can use QR codes in traditional media to create interactive mobile marketing campaigns. And while terms of the deal weren’t disclosed, Snappr’s status as a member of CrunchBase’s deadpool indicates the price tag couldn’t have been very high.

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GoldSpot Media is one of a small army of companies looking to deliver video ads within mobile applications. But unlike its cohorts, it’s also trying to ease network congestion — by delivering its ads at very particular times.

The Sunnyvale, Calif.-based startup launched in 2006 with an eye to delivering ads within streaming video, but that opportunity fizzled as broadcast companies like Qualcomm’s FLO TV failed to gain traction with mobile users. So it turned its technology to applications, creating a drag-and-drop offering called miApp that enables publishers and ad agencies to add various types of video ads to their apps and deploy them across app stores and devices. The offering is the foundation of an interactive ad network that will launch “pretty soon,” according to co-founder and CEO Srini Dharmaji.

GoldSpot pocketed $3 million in a Series A round of funding two years ago from Exa Ventures and hopes to close a second round in the third quarter of this year. While mobile video advertising is still a very small space, established players like AdMob, which was purchased by Google, and Millennial Media already loom large on the field. But Dharmaji claims a key differentiator for GoldSpot is how it delivers ads: while the bigger ad networks stream video ads from the network, GoldSpot uses what he calls “opportunistic downloads” to download campaigns in ways that minimally weigh down cellular networks.

“We detect when a device is connected to Wi-Fi, for example, and opportunistically download the campaigns that are running for the month, so we don’t tax the 3G network in the process,” Dharmaji told me. Meanwhile, an app running on the cell network could receive the ad in the background and cache it on the phone to be presented later. “The app is released into the app store and is downloaded by the user. He starts the app and doesn’t see any ads in the first run, so the next time the user comes back he sees it.”

The technology also delivers content during off-peak times, “waking up” devices to cache ads overnight or during other periods when network congestion isn’t an issue. That strategy enables GoldSpot to deliver higher-quality video, according to Dharmaji, and to play ads quickly once they’re cached. The technology supports a variety of video ads including split-screen and interstitials, giving advertisers and publishers the freedom to choose the best type for their apps and pitches.

At this point, just how much opportunity exists in mobile video advertising is far from clear. In-app advertising is very much a new space where revenues can be hard to come by, and ads can be intrusive and off-putting. That’s especially true of video ads that can seem out of place and even jolting in non-video applications. And GoldSpot has its work cut out for in competing with entrenched, deep-pocketed players like Millennial and AdMob. If GoldSpot can present higher quality video ads, though — and if it can help carriers address increasingly important congestion concerns — it may be able to compete with the Goliaths in the space.

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Image courtesy GoldSpot Media

This morning, Apple finally announced the release date for its anticipated iPad, detailing that the tablet device will be available starting Saturday, April 3.

The early April weekend launch will see only the Wi-Fi model of the touch-screen device being made available, starting at $499, with the 3G model being introduced later that month. Apple detailed that these dates only apply to the U.S., with international releases in Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the United Kingdom to come towards the end of April. Sadly no specific dates or pricing for the international launch have been confirmed as of yet, however Macworld UK has been speculating about the price for British customers.

In the lead up to the official launch, Apple will be running a pre-order scheme, which starts March 12. Then on April 3, customers based in the U.S. will have their Wi-Fi iPad delivered to their doorstep or to their local Apple Store for pickup, whichever they choose. No word yet on the official launch or delivery date for the 3G model.

Apple CEO Steve Jobs, who revealed the iPad back in January, said the following about the upcoming launch: “We’re excited for customers to get their hands on this magical and revolutionary product and connect with their apps and content in a more intimate, intuitive and fun way than ever before.”

Reports popped up early this week hinting that the iPad would launch on March 26, with further rumors suggesting that iPad’s would be arriving in stores for staff training as early as March 10. Of course word from Apple regarding the launch has now set the record straight, confirming the speculated delay until April.

So with the iPad launch details now laid bare, will you be picking one up at launch? If so are you opting for the Wi-Fi or 3G model? Let us know in the comments.

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Kicking things off with the proclamation “We’re betting the company on it,” Microsoft CEO Steve Ballmer discussed his vision of cloud computing at the University of Washington this morning. He described a rapidly changing technology ecosystem in which the cloud is causing large shifts in server and storage technologies, as well as user behavior, and creating the necessity to although he emphasized that “the goal can’t be to throw out all the world’s software and start again.”

Microsoft’s chief software architect, Ray Ozzie, seen in the picture below, was in the audience for the address, and Ballmer said that a memo from Ozzie about five years ago was the beginning of the cloud-based product and research work that Microsoft is doing. Prior to his stint at Microsoft, Ozzie was best known for his work on Lotus Notes, collaborative online workgroup applications and other early software projects that were precursors to today’s online hosted applications. Ballmer’s speech was less about specific services, such as Azure, than it was about how the cloud is influencing numerous Microsoft projects and products.

One of the centerpieces of the address was a demonstration of the new mapping features available through Microsoft’s Bing search engine, which are quite advanced. You can experiment with them by clicking on “Map Apps” here. The demonstration included zooming from aerial photo views of Washington state through combined photo-based and 3D-based virtual tours of specific neighborhoods. Ballmer punctuated the mapping demonstration with references to how coming advances in machine learning will make the cloud much smarter than it is today. “We’ve got to open this idea of learning done in the cloud up to people with innovative ideas, including many  scientists,” Ballmer said.

Ballmer’s address also included extensive demonstrations of how Xbox Live will integrate with cloud-based applications and services. The demonstrations included streaming TV applications from around the world, and Ballmer said that the Xbox Live-based cloud experience will become richer when Microsoft ships the upcoming Project Natal, a camera that can recognize gestures and lets users communicate online via gestures.

Ballmer made numerous references to software and hardware problems that must be solved before cloud computing can advance in truly meaningful ways. “There are latencey problems,” he said, “and many software problems.” On the hardware side, he said that server technology is in the middle of a renaissance where it is driving cloud advancements and the cloud is, in turn, changing servers. He said that cloud-based “scale issues” will continue to change how servers and software for them are built for years to come.

He also said that “the cloud wants smarter devices,” and that everything from sensors to VoIP technology have to rapidly advance in order to keep up with demand for cloud applications. “Five years from now, the cloud will mean that phones don’t look like they do now,” he noted.

While he was adamant that tech platforms need to improve before cloud computing realizes its full promise, Ballmer said that it is already ushering in “a new class of creators” and new kinds of responsibilities, notably privacy-centric ones. Microsoft is involved with various research projects in these areas, and the company has a blog post up describing these efforts.