Microsoft's future is grounded in software and services integrated for use on the server, desktop or mobile devices , according to Ray Ozzie, the company's chief software architect.

Ozzie Monday opened the company's annual Mix developers conference in Las Vegas with a keynote address during which he laid out Microsoft's direction in a world where online services have taken hold.

Services will not replace local client software, only offer a complement to code running on the desktop or vice versa, he said.

Microsoft will continue to invest in its traditional Win32 API, but rich Internet applications would offer the ability to marry desktop applications and online services, he said. "The simple concept of the web is no longer simple," Ozzie said.

The normally staid Ozzie said his work over the past couple of years at Microsoft on this strategy has been exciting. "In case it is not clear to you, I'm having a blast," he said.

Ozzie tailored his strategy message for the conference's developer audience, highlighting Microsoft's recently introduced Silverlight platform, a runtime browser plug-in for running rich applications and supporting video. "We think Silverlight will change the game for video on the web," he said.

Microsoft is now shipping the first beta of Silverlight 1.0 and an Alpha version of Silverlight 1.1. Silverlight 1.0 is expected to ship this summer.

Ozzie said Microsoft would integrate into the Silverlight programming model support for its .Net framework, which is a programming tool used to develop new applications for Windows.

The combination of the Silverlight tools and the .Net framework, which will include the high-performance Common Language Runtime environment, gives developers common tools to develop local and Web-based applications using Visual Studio to write code and Expressions Studio to design interfaces.

Ozzie said Silverlight's cross-platform, cross-browser runtime was the first of three parts of Microsoft's Silverlight strategy for supporting software and services.

"We are delivering a complete family of tools and frameworks for the design, development and deployment of media rich applications from Silverlight on the web to the full .Net framework on Windows. From Visual Studio for developers to Expressions Studio for designers," Ozzie said.

He also announced that the Expressions Studio design tool also began shipping today.

With Silverlight as the first step, he said the second phase would be the inclusion of Silverlight's rich application deployment platform as a full-fledged member of Microsoft's .Net family.

The third phase is Silverlight Streaming, an online multi-media storage service that is available for preview.

"It is our aspiration to create tools and platforms that will make your life as a developer easier and more productive and profitable in developing these software-plus-services solutions," he said.

Ozzie said the combination of software and services would take many forms. Some of the software plus services applications would focus more on services with client-side complements and that some would be more client side with a services component.

Ozzie wrapped up those options in what he called software-as-a-service Version 2, which "has grown to fully embrace the uniquely valuable role of the client." He said software-as-a-service Version 1 was the web inside a browser.

He termed today's browser-based applications "universal web applications" and said they are characterized as being universally accessible across the web even if it means developers have to make some "user experience" trade-offs.

Ozzie said the next wave of applications will be "experience first," which he added can be highly interactive, need to work offline or in conjunction with other applications.

"Developers will want to deliver the best possible experience that a computer or a device can offer and go hard core with the capabilities of the target device," he said.

Ozzie then introduced the third leg of the Silverlight strategy, which he said will include a set of foundational platform investments with the Silverlight plug-in being the first.

"What we are building is a services platform, an open, interoperable foundation for software plus services, a platform that will make it possible for you to build, deploy and manage service-centric universal web and experience-first solutions that span the PC, the web, the phone and ultimately many other kinds of devices," he said.

He said the next foundational element of Silverlight is a storage service called Silverlight Streaming. Users will be able to store their Silverlight applications and the associated photos and video clips, up to 4GB, on Microsoft's storage service in the cloud for no charge.

"This software and services pattern is very powerful and it gives users tremendous flexibility," Ozzie said. "It brings together the best of the Web, the best of the desktop and the best of devices always using the services as a hub."