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IDG News Service - As the technology industry moves toward the cloud, users can ease the transition by adopting a hybrid computing model, said Bob Muglia, Microsoft's president of servers and tools, at the kickoff keynote speech at the company's TechEd 2010 event in New Orleans Monday.

"We're at the cusp of a major transformation in the industry called cloud computing. It will affect us all. But to get there it will require a lot of execution and changes," he said. "We're creating the precursors for the cloud. Today there is a lot of work you're doing inside your environment that could be delivered as a service."

While Microsoft has been criticized for coming late to the cloud computing party, the company seems to be taking the home-field advantage, namely by extending its already existing software to run or manage applications on Windows Azure or other .Net cloud offerings.

While Microsoft's own cloud service, Azure, was mentioned here, the emphasis remains with software products that are becoming increasingly cloud-enabled.

"There are thousands of applications already built," Muglia said in a press conference after his keynote, adding that Microsoft is hoping that customers will see the benefit of running some of these applications in a cloud, be it in Microsoft's Azure cloud, a private cloud or a .Net cloud offered by one of Microsoft's partners.

Among the tools he highlighted during the keynote are Microsoft Systems Center, Visual Studio 2010, software from the 2009 Opalis acquisition and Windows Phone 7.

With Systems Center, administrators will be able to manage copies of SQL Server that reside both on local machines and in the cloud. With the new version 4 of .Net, made available this week, developers can specify if they want the application they are creating to run on the cloud or internally.

Perhaps the most-talked-about technology was the Opalis software, which will be included with Systems Center. With this software, administrators can break services down into individual components, including the operating system, the database, the server OS and the middleware. This will allow them to update an operating system, for instance, even while the program is running. It will also allow the administrator to specify a range of instances that can run of each service.

"Opalis provides a very general-purpose engine that can orchestrate processes within IT," Muglia said. He noted it can work not only with Windows clients, but with Unix and Linux ones as well. It also works well with Microsoft PowerShell, he said.

Muglia also demonstrated how Windows Phone 7 will work in this environment. The new interface of Windows Phone 7 will be composed of tiles, with each tile leading to a particular application or service. Users can mix work applications, such as e-mail, and home applications, such as Zune music. The company's mobile OS, meanwhile, can tie seamlessly with Exchange, synchronizing all the e-mail messages and their flags.

The mobile OS will also be able to be a full participant in a Microsoft SharePoint environment. Users can call up documents, make edits and have them committed back to the SharePoint instance.

Muglia also noted that the first service packs for Windows 2008 release 2 and Windows 7 will be available in July.

At the press conference, Muglia admitted that the present versions of Microsoft applications on Azure, such as Windows Azure and SQL Azure, do not have all the capabilities of the standard software editions. For instance, the SQL Services management console is not available on Azure. Feature parity will be coming in the future, however.

"We're working hard on Azure," he said.