According to the Telegraph, after a briefing at U of Washington on March 4, Ballmer sent an email to staff :

Other companies have defined the cloud in a narrow, one-dimensional way.

Although these companies provide some interesting components, Microsoft is uniquely delivering on a wide range of cloud capabilities that bring increasingly more value to our customers.

This view fuels our investments across the entire company, from datacenters to cloud platform technologies to cloud-based development tools and applications. Today, nearly every one of our products has, or is developing, features or services that support the cloud. As I said today, when it comes to the cloud, we are all in. We are all in across every product line we have and across every dimension of the cloud.

Of course, there is more work to do. We have strong competitors. We need to be (and are) willing to change our business models to take advantage of the cloud. We must move at 'cloud speed', especially in our consumer offerings. And we need to be crystal clear about the value we provide to all our customers.

We have an enormous opportunity in front of us. We have great products and services in the market today and a range of new ones on their way.

All of our products make the cloud better, and the cloud makes our products better."

Techcrunch have posted a verbatim copy of the email here

As usual, they (Microsoft) are late: Amazon, Google et al have had viable products in this space for three or more years. Also as usual, they have a huge amount of marketing muscle, plenty of engineering resource and some interesting products. Time will tell.