Tentatively entitled 'Windows Cloud', although Ballmer suggested it would have a "snazzier name" at launch, the product is designed to make it possible to "just… write an application and… push it to the cloud", Ballmer said.
'Cloud computing' is a term used to describe a situation where applications are based on web servers and accessed through internet connections, rather than being installed on clients.
This leads to a new business model of subscription-based applications, generally known as 'software as a service' (SaaS) but dubbed by Microsoft as 'software plus services'.
Amazon said on Wednesday that it would offer some of its cloud-computing customers the option of running Windows over its systems. Others have argued that Google's recently launched Chrome browser includes many features, such as its use of the Gears offline-functionality feature, that could help it evolve at some point into a cloud-based operating system.
"Every time there's a big new trend, a big new opportunity, we write a new operating system," Ballmer told delegates at the conference. "We're now in the process of writing a new operating system. For lack of a better term, before we announce it in four weeks, I'll call it Windows Cloud."
"It's too hard today for people to write cloud applications," Ballmer continued. "You've got to… hire a [hosting service or] have your own servers; you've got to have some sense of how you want to build your application and manage your servers. Even if they're physically being taken care of by a third party, that's a complex process. You should just be able to write an application and, if you will, push it to the cloud, and have the service taken care of."
Ballmer suggested that developers would be able to use the .NET Framework to build applications for the cloud server, browser and client, and said Windows Cloud would make it possible to deliver "click-to-run" software more efficiently than was possible with "most software from yesteryear".
"We don't want to make everything as least-common-denominator as the browser, but we want to make things as easy as click to run," Ballmer said. "So we've got to evolve Windows to the .NET model. You still get all those advantages that we associate with PC operating systems. You get rich user interfaces and user interaction, which is only going to get better with speech."
"With PC operating systems today, you can mix and match and control your own applications. You want to be able to do that, even if the application is distributed to you from the cloud. There's a lot that will happen on the underlying platform — the whole way we think about writing and managing applications as the world moves towards software plus services," Ballmer said.
Ballmer also alluded to "new business models" that would accompany the cloud approach. "Some things will be sold, some things will be put out on a subscription basis, some things will be monetized through advertising. We need to make sure there's a model and a platform that supports all of that."
Ballmer added that the time such services would take to appear would depend on the customer. "In the consumer market, a lot of this will happen quickly," he said. "In the enterprise market, a lot of this stuff could take three, four, seven or more years to really transpire".