Asked about the future role of a traditional boxed-software provider such as Microsoft, he said Microsoft "absolutely believes in evolving to this kind of click-to-run internet-style of simplicity across all products". Microsoft needs products that can be produced every few months where necessary, products that come out every year and those that take a few years to be delivered, Ballmer said.
The article does note that Microsoft really hasn't kept up with other vendors that are pushing this, but in typical Redmond style they are looking to to slowly become a giant in it, rather than be a pioneer. He didn't comment about personal software rights or DRM, which is probably good since DRM is a bit of a sore spot for MS at the moment. It wasn't even a month ago that Microsoft talked about a web-based office. It does go to show that software-as-a-service is headed our way.