Bob Muglia, president of the company's Server and Tools business, sat down to talk more about the cloud and the opportunity ahead for Microsoft.

Even among tech geeks, there is confusion and debate over what cloud computing is, even as many consumers are already well schooled with cloud services such as Hotmail, Facebook, iTunes or Flickr.

Over time, more companies will build similar Web-based services that live on remote servers, rather than being stored in a personal computer.

Microsoft launched Windows Azure for developers this week, hoping the operating system for the cloud draws them over competing offerings from Google, Amazon.com, Yahoo and Salesforce.com.

Poking fun at the confusion around cloud computing, Muglia appeared in a video during his Tuesday keynote at PDC.

Called "Bob Muglia. Life Coach," it depicts Muglia helping a man dressed as a cloud with an identity crisis. At the end, the 22-year Microsoft veteran jumps around, Steve Ballmer style, exhorting the cloud to "Soar! Soar! Soar!" The cloud then jumps off the side of the building.

Here are edited excerpts of the interview with Muglia:

Question: So what was the thinking behind you playing a life coach to a man in a cloud suit?

Answer: I think the cloud is fairly confusing to people _ what it really is, the nature of the cloud and the way it's been defined. I've watched it evolve in the industry. If you look at definitions from 18 months ago, it's hard for everybody to keep up with it.

Q: Let's say your child's schoolteacher asked you what the cloud is. What would you say?

A: A cloud is a whole broad way to provide an array of services to people of all types and companies of all types.

If you look at the way consumers work with (online) services, it is almost all cloud driven: e-mail, Twitter, Facebook, online shopping. ... Businesses are (also) looking at how to bring their applications up internally.

As people first built applications and hosted them on the Web, we've learned an awful lot about what it means to develop this next generation of applications that lowers the cost of running them and improves the effectiveness.

I do my home banking on Sunday morning most of the time. About once a month or every other month, that's when they update it (and I can't access it). ...

That happens all the time and it shouldn't happen. ... You don't expect to see Bing or Google down. They're supposed to not be down.