As one of a phalanx of executives, engineers, partners and customers gathered for Microsoft's blowout virtualization launch Tuesday in Seattle, Kevin Turner, chief operating officer for Microsoft, talked with CIO.com writer Kevin Fogarty about what he and other top managers perceive to be the primary needs of its CIO customers. Leading topics include the ability to save money, help formulate and drive business strategy, and outsource non-strategic applications in order to focus on IT work that creates a real competitive advantage. Q: Microsoft has talked a lot about specific products and strategies this week. What are the overall trends driving its strategy in virtualization? Kevin Turner: There really are three things we see happening in the marketplace. The first is that CEOs are increasing the expectations on the IT organization. Fifteen years ago it was more about coming in under budget, keeping the lights on and not getting in the way of growth and scalability. Just doing that you could get a pretty decent grade as CIO. Now we're working with the idea of the IT person becoming a business thought leader and showing up more at the table as it relates to business strategy. We've certainly heard that before as an idea, but more recently it's moved from being an expectation to a requirement.IT is also having to adapt to the needs of a rapidly changing work force. People are spending less and less time at their desks, and they're bringing the technology to where the work happens. That is one area and the collaboration around it is where we see a big trend. The third thing is the economic climate, the credit crisis, just the sheer price of oil and gas. People are really looking for IT to be more efficient and effective. That will probably be on the goal sheet forever, but the times we're in economically are not the ones we were in three years ago. Q: Most of the talk at the virtualization launch was about data centers, but Microsoft has talked a lot in the recent past about cloud computing and mixed software-as-a-service models. Where do you see Microsoft's business model progressing with those things in mind? Turner: We see sort of a hybrid model developing. If you take what you call cloud computing and we call software plus services, you have three different models:For certain big companies, we believe they're going to want to manage most of their own IT, for governance reasons, for security reasons, for competitive reasons. So that's our traditional business model and we're going to continue to offer that. Then there are other functions where, quite honestly, we have partners in the enterprise, Accenture or EDS or others, that have more expertise with certain line-of-business applications or certain operational elements. And we're going to enable our technologies so they can be partner-hosted by those partners. Then there's the third model where we have lots of big customers coming to us right now saying 'for this type of user, for these applications, whether it's Exchange or Outlook or Sharepoint, we want Microsoft to host it.' If you look at what Salesforce is doing right now, or Google's application suite, their model is you let us host it or there's no software as a service. Our model is build around thinking that customers are going to want us to host two our of those three or three out of those three areas and we want to be sure we enable that. As people come to us about managing the desktop or Exchange, that will free up time, money and resources for the IT department to put more IQ, more deliberate, intentional IQ on the ability to differentiate in their business model. Q: Users and analyst surveys are saying there aren't enough trained virtualization specialists out there in the marketplace. What has Microsoft been doing to change that? Turner: We've trained more than 500,000 people in the last 10 months in our Heroes Happen Now launch program in the marketplace. When we talk about lower total cost of ownership, training and management and licensing are all elements of that. But training is certainly one of those areas that is within our reach and I feel great about where we are with that. That was one of the most successful [training rollouts] we've ever done, and with this virtualization launch we're going to do it again; we're hitting the marketplace with it a second time as we do the launch in different places around the world.