We've been shouting about "oh cloud" here at the WPC now for about four years, and it's exciting for me to have a chance to kick off WPC 2010 in a year in which I think it's been clear that the opportunity and the transition to the cloud for enterprise and business customers, and for partners around the world is absolutely clear.

And I'm super enthused to see so many of you here today, the largest attendance at the Worldwide Partner Conference ever. I think that speaks to some dimension on the improvements in the economy, but I think it speaks in a lot of dimension to the number of our partners who are moving with us and really embracing the cloud, and really hearing what our customers are saying about the potential that they see to streamline their operations and improve their agility using technologies from the cloud.

And we have a lot of work left to do, we Microsoft and we together, with our 640,000 partners around the globe, but there's no question the path is clear and inevitable. There's no question that Microsoft has chosen to embrace that path together with all of you, and there's no question that we still have more to do to develop the mutual opportunities in the cloud.

I'm going to talk about a lot of things today, and I'm going to center much of what I say in the cloud.

I know there are some other things on your mind, and I'll try to get to all of them, but I want to start off on this Partner Conference where I've started off the last few years, you, your importance and your transition to this world of the cloud.

This last year has been a phenomenal year for Microsoft, all things considered. We certainly started the financial year, as did all of you, coming in the center of the gloom of the financial crisis. And yet throughout the year, through the incredible efforts, the incredible hard work of our partners around the world, we have certainly seen our business accelerate in amazing ways.

And that acceleration is due to you. As a company we remain built entirely on the backs of the relationships that we have with partners. For the success, for your energy, for the investment that you make every day in understanding our technologies and helping our customers I want to start by saying to all of you thank you. Thank you for your work on Windows 7 and what that has done for PC sales and unit volumes. Thanks for your work on Microsoft Office. We've had an incredible reception to the new version of Office, Office 2010, SharePoint, Exchange.

Thank you for what you've done for the Microsoft Online Services. Literally thousands of new enterprise customers in the last several months, through your good and hard work, have signed up and are migrating to Exchange Online and SharePoint Online as we speak.

Thank you for your good work certainly with the new releases of Windows Server and SQL Server. We've had over 670,000 trial downloads of the new release, SQL Server 2008 R2, in just the last two months as many of you and the customers you serve look to build new solutions based around SQL Server.

Thank you for the support of Windows Azure. A year ago, we had nobody, zero people using Windows Azure. Today, there's over 10,000 paying customers, partners and end customers, who are building applications and moving forward with Azure.

And the list doesn't end there. The progress we've made eclipsing 30 percent now with the virtualization market comes through the hard work and efforts and energy of our partners.

So, together we've driven a lot of volume, we've made a lot of business, we've helped a lot of customers around the globe improve their business and emerge stronger from the economic difficulties of the preceding 12 months. And for all of that I want to say thank you, thank you, thank you, and I want to say a thank you in advance, because I'll tell you, there's as much to do or more in the next 12 months as there has been in the last 12 months. To all of you thanks, we really appreciate the partnership. (Applause.)

I'm going to start with the opportunities now for all of us in the cloud. The cloud continues to bring new opportunities.

I had a chance to give a speech that wound up really in my mind framing how we think about the cloud, and what it is enabling us to do, and us to do together with you for our customers. I gave this speech back in about February, March, actually at a university in the United States, and I want to go through those themes for you again. We really focused in on a number of key dimensions of the cloud, and I'm going to run through those, and I want to make sure that each and every one of them, what the transformation is that's coming from the cloud and why we should all be excited about it. The new things we'll be able to do for our customers is clear to all of us.

The first thing I would say for sure, the first dimension, first principle of the cloud is the cloud really will create for all of us, for Microsoft, for our partners, for our customers, the cloud creates new opportunities and new responsibilities.

When we think about the cloud, just in this room, for years there have been classes of customers that were hard for us to serve, small businesses, departments in larger companies, foreign subsidiaries that are very remote from headquarters in the companies that we serve.

For those of you who are software developers, many of you have come to Microsoft and said, "I'm an ISV doing business here in Toronto. How can you help me sell my application to customers in Tokyo, for example?"

The cloud really does give a new set of facilities, marketplace services, distribution services, customization services, that will open up for all of us in this room a set of new markets and a set of new customers.

The cloud enables us, all of us, to help our customers streamline their operations and improve their agility. In some senses I think we all know for our customers their mission No. 1 is to take cost out of the ongoing operations and maintenance of IT so they can invest more in new scenarios and new applications.

Because of what the cloud, both technologies like Azure, as well as the Microsoft Online Services, can mean for the customer, we can remove many of those costs and much of that complexity, and enable more of the value-add that all of you bring to our customers to focus in on the new applications and new scenarios our customers want to embrace, that business value that all IT directors and managers talk about.

And lastly, the cloud brings a set of new responsibilities. When our customers start putting their data in our systems, and we'll talk with you today some about public cloud and customer-hosted cloud and partner-hosted cloud, but when customers entrust more and more of their data and operations to all of us, the need to do better and better jobs on reliability, security, privacy, it's operational excellence, but it's also technologies that make it simpler and easier to keep systems up and running and private and secure. And as we talk to you over the course of WPC, you'll hear us talk about some of the investments that we're making in our cloud offerings in order to facilitate this path forward.

So, that's No. 1: opportunity and responsibility.

We've had very good success, as I remarked a minute ago, but I wanted to share with you a list of some of the customers who've already chosen to move with us, with you. So, Microsoft and our partners together are helping the companies on this slide in one way or another move to the cloud: Starbucks, McDonald's, Quark, 3M, Nokia, GlaxoSmithKline, Aon, and the list goes on and on.

We are not at a phase where we're just seeing small companies take experimental steps into the cloud. This opportunity is real and concrete and available to all of us today.

The second dimension of the cloud, the cloud learns and helps you learn, decide and take action.

A lot of what we talk about in the cloud can oftentimes sound like all we're doing is moving things from enterprise datacenters to the cloud, but because the cloud is a shared resource, there will be new scenarios that didn't make sense or couldn't really be executed just in an enterprise datacenter that we're now pursuing.

We've learned a lot about this from our work on Bing. We've come a long way in the last year since we were here. We picked up about 3 share points in the last year as the Bing technologies continue to get better and better, and we've gone from about 8.5 to 11.5 percent market share.

But what you learn by building a product like Bing is how much once you have millions of people trying to figure things out, trying to make decisions, trying to mine data in order to take action, you learn a lot about the technology which lets you statistically understand what users are interested in doing.

When I type "show me the sales data — show me industry-wide sales of personal computers by country," that is a BI question that I just happen to pose to the search engine. So, how do we take those technologies, how do we take what we're learning about natural language and statistical reasoning, how do we apply that to enterprise technologies like SharePoint search, like SQL BI, how do we apply those technologies as we move them through Microsoft Online Services into cloud.

See the rest of the speech in video below...

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