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.