IMHO I think Mr. Ballmer is trying to move away from a periodic revenue stream (every few years I buy a PC running a Windows O/S, and add MS Office for $$$) to a continuous revenue stream where accessing MS Office is done via the 'cloud', and it turns into a Pay-Per-Use utility.
To me, this feels like the difference between buying/driving your own car vs. relying solely on a taxi for all of your transportation needs.
Financially-speaking, this only makes sense for a small percentage of people out there living in unusual circumstances.(NYC?)
For the rest of us, relying upon a Pay-Per-Use taxi fails the price/mile calculation. If cloud-computing isn't going to raise the price of using PCs, please enlighten me.
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