Microsoft executives said they will response the threat to its software posed by competitors such as Google, who offer Web-based applications to users. They will add some similar online services to its most-famous PC application, such as Office or Excel.

At an annual meeting with financial analysts participating, Microsoft pointed out its plan at this stage is to compete with companies offering free or lower-cost “software as a service”.

“We're not moving toward a world of thin computing,” Steven A. Ballmer, Microsoft's chief executive said. “We're moving toward a world of software plus services.”

Ballmer also indicated that every Microsoft software application will be transformed with a Web-services component added within three to ten years.