It sounds like all the Windows RTM rumours are quashed.  MS people are tweeting that this session will focus on MS online services such as Azure.  I suspect some of the newer systems management online services will be talked about.

Bob Muglia came on stage after everyone in the audience was named as partner of the year ;-)  He told us all about his holidays … I napped for a while.  Ah, here we go.  He’s talking about the opportunities coming from his branch … server tools and System Center.  He’s going to talk about these and Azure/cloud.

We got a video on Hyper-V 2008 R2.  Pretty truthful talking about skills and costs.  Muglia demo’d VMM 2008 R2.  It’s an evolution rather than a radical reinvention so there’s no great leap in skills.  Distributed applications on OpsMgr 2007 R2 was shown.  He talked about the price difference between VMware and Hyper-V System Centre.  Do the maths; it’s real.  He did a Live Migration using streaming media.  I hate that .. it’s lazy.  Media Player buffers.  Dave Northey in MS Ireland does a ping to the VM or a file copy from an XP VM.  Very real test and always works.

On to the cloud.  He quickly talks about the cost reduction in administration.  He talks about what MS does …. hmm, we do that at work.  Except we don’t have to comply with the Patriot Act … doesn’t matter where MS builds a data centre, they need to comply with the USA Patriot Act and therefore contravene the EU Data Protection Act.  Advantages on hosting:

• Someone else does it
• Capacity on demand
• Potential global reach
• Expenses now an operating expense rather than a capital expense

Other news:

• MS evolving Server and System Center based on hosting partners experience and feedback.  To me, only OpsMgr is 100% ready.  VMM is nearly there .. self service relies on the network being too open at the moment, e.g. remote console relies access to the host server and DNS lookup for the hosting infrastructure.  DPM is totally unsuitable for the cloud as it stands.
• Dynamic Datacenter Alliance for hosters and system integrators was announced.  There’s a Dynamic Data Center toolkit.  The DDC sounds like an evolution of an old toolkit.  It’s a layer above everything else.  It’s based on PowerShell.  To join the alliance you must be a SPLA partner, attained the Hosting competency and deployed a “Dynamic Datacenter”.
• SPLA Essentials is a new SPLA licensing scheme for hosting companies.  Hopefully it will be a lot simpler.  SPLA is a nightmare.  Essentials is intended for smaller partners. 
• €150 billion opportunity through 2013 in the hosting/cloud business.  95% of that will be through MS partners.
• Azure is launched as of now.  Free to use now.  It goes commercial in November.  The pricing scheme is consumption based, i.e. unpredictable.
• New version of SCE with VMM built in on the way later this year.
• Windows Server 2008 R2 to RTM in a matter of weeks.

And on comes Steve Ballmer …

Singing Bing.  He’s goes on to talk … about stuff.  He then brought in a guy from Fortune magazine to ask Steve some of the attendee questions:

• Is Microsoft building a rival to Google Chrome and how will it affect MS products and partners? Steve says he’ll be respectful while giggling.  Why announce it if it doesn’t exist?  MS is not going to have 2 client operating systems.  50% of the time even when online we are working offline.
• Is it all about the browser or is it all about the OS.  What to develop on?  Stick to Windows, IE and Silverlight.  That will give you best of both worlds.
• Apples advertising mocks any problems MS has.  Did I’m a PC.  What is MS doing and will they use partners as a differentiator?  Continue to tell the story of the PC, e.g. recent I’m a PC that talks about the cost of the Mac.  He likes the partner inclusion suggestion.
• Losing deals to LAMP, when will MS make it easy under one agreement with a reasonable price to compete?  He took a note because he doesn’t have an answer and asks the asker to email him – steveb@microsoft.com :-)
• What are the characteristics of MS partners that will survive and thrive in this economy?  Deliver compelling value to customers.  Remind them after the delivery.
• Show how you can save them money and sell on the theme of growth?  Do more with less.  Customers trying to do “with less, do more”, e.g. virtualization and cost cutting.
• What are the best solutions to stop piracy? The more you do to irradiate it, the more inconvenient your product becomes for the legitimate user.
• Government relations and antitrust – what is MS doing, e.g. what’s behind the EU IE unbundling from Windows 7?  Anti-trust and government relations are not necessarily related issues.  Lots of successful relationships with governments.  But antitrust laws – he says are quite separate. 
• Will there be an IT boom after the recession and will Windows 7 spark it? He thinks that if things even stayed as they are for 10 years, there would be some sort of demand growth for IT – unless there was another economic crash.  Windows 7 might be the catalyst but could be the things like BI. 
• How does MS see B2B social networking contributing to channel revenue?  It’s a big idea.  Talks about Office 2010 and SharePoint 2010 for colleague social networking in companies. 
• MS Online Services will compete with MS Partners.  How do partners prepare?  Still work there for people.  MS the only company selling directly, through partners and via cloud.  Value add via partners still required.

Final thoughts: he’s excited to Ritalin levels.