Bill Gates' replacement Ray Ozzie on whose shoulders the company's future rests, the guy who has to dig Microsoft out of the Internet hole it finds itself it and at all costs salvage the client, started this week to try to redefine SaaS, software-as-a-service, as "software and a service," a combination of desktop software and web-based widgetry, the company's latest shot at the Internet.

"Even SaaS providers have found the need to expand offerings to include an offline edition," he said. "SaaS 1 meant the web; SaaS 2 has come to embrace the unique value of the client."

"It is thought provoking," he ventured, "to listen to the extreme viewpoint: no more software." But "I've been though five software transitions and the pendulum did swing, but the best solutions were integrated that would bring together the best of one world with the best of the other."