As Microsoft's latest internal slogan is quick to point out, the software company is "all in" when it comes to the cloud. But one of the products that points to such a statement being more of a half-truth is Office, which while in the process of being ported to the cloud and gaining an increasing number of Web interactions, is still a software program--and a very popular one at that.

In fact, Office is one of Microsoft's biggest and fastest selling software franchises next to Windows, as Microsoft's CEO Steve Ballmer pointed out at the top of the company's annual shareholders meeting this week. While Office may someday be an all-cloud affair, for the foreseeable future, it will continue to be offered as something you can install.

Heading up Microsoft's Office division is Kurt DelBene, who took up the reins just last month. Yesterday his group launched Lync, the successor to Microsoft Office Communicator, which mixes instant messaging, audio and video chat, and a VoIP service. It effectively completes the puzzle of apps that make up the Office suite. Lync, which goes on sale in two weeks, is beginning as a server product companies will be able to deploy on their own hardware, before moving to a hosted cloud service as part of Microsoft's Office365 suite early next year.

DelBene took time out of Lync's launch day to talk to CNET about a variety of topics, including the Lync platform, Microsoft's partnership with Facebook that is making MS Office attachments readable through the company's Office.com site, as well as how Office the software will coexist with Office the cloud service. Below is an edited transcript from that conversation.

Question: Congratulations on your promotion.
DelBene: Thank you very much. I'm excited.

Can you talk about what, if any kind of collaboration the Lync team has with the Windows Live Messenger team? Obviously the two are very different products with different markets, and this product came to replace Messenger as part of the Communicator product, but I'd imagine things that come to Lync might one day end up in Messenger one day and vice versa.
DelBene: There's actually a very good collaboration across the two teams. And so, if you think about the focus of the Office team and the Lync team as around business users, and think about the Windows Live team, or the Messenger team being around a consumer audience, then neither product really replaces the other. And so the goal is really more around how do you get interoperability between the two products, which is what we demonstrated in the launch event. And so, that's how you can see Chris (Capossela) being onstage being on Messenger, and talking to Gurdeep (Singh Pall) who is on Lync.

The partnership goes beyond that, though, in that the underlying technology is shared across the teams. And so we have some deep experts in audio-video conferencing within the Lync team. And so they actually work with the Messenger team to integrate those capabilities into the messenger client. And so we can share that expertise as opposed to duplicating it.

A lot of business is being done on phones now. Can you talk about some things that he was doing to make some part of the desktop experience carry over to mobile devices, especially with Lync? I know one of the things you guys talked about this morning was transferring an active conversation from one device to another.
DelBene: That's one piece of it, because people when they're on the go, they think about wanting to connect, having their desk phone follow them. And so we make it super-easy for you to forward your calls, figure out a schedule onto which you forward your calls. So, it really becomes fairly seamless to think about the mobile phone.

And then you can take that a step further and think about clients that are on the mobile phone themselves, where you're in the presence of various of the people on our buddy list, or anybody from the organization would be present on your phone and you can actually connect to them from the phone originally, as well. And so you can think about starting from the mobile phone and starting from somebody's presence and making a phone call to them directly from the phone. So, in the announcement, I think Gurdeep mentioned connectivity to Windows Phone 7 in 2011, and for the iPhone, as well. So, that would be for actually having a client on the phone.

Was there anything in particular piece of hardware from what Gurdeep referred to as "the wall of fame" during today's Lync presentation that's really been specialized for Lync? Is there a big standout product that is maybe something competitors don't have?
DelBene: Well, the first thing I think they don't have is the breadth of products. And so, the key differentiator, I think for Lync, is the focus on open standards and that customers will want choice in terms of what hardware they provide, or that they purchase. And so, I think the wall of fame is most impressive because of the variety of functionality that's there.

I think the second thing is the variety in terms of devices and solutions for the PC as well. And so there are people who are going to embrace Lync by having a PC experience, and there are people who are going to embrace it with a more traditional IP/PBX or IP phone, and we think there should be great solutions across both of those.

I will also say I continue to be excited about the roundtable solution, which is a great innovation of both hardware and software working together, and that's the panorama view that Gurdeep showed of everybody in the meeting. I think that the beauty of great software innovation coupled with great hardware design, that product is a great example of that and shows the kinds of things that you can do when you have hardware partners working with software partners on innovative solutions.

Speaking of which, the Kinect integration you guys showed off this morning is obviously a killer demo, but I'm wondering do you envision people getting home from work and maybe starting to play a game, and they get a call from their boss? Or is this more of an extra solution on top of what Kinect already does?
DelBene: I think both. There are a couple of angles there. I think I am excited about that as an endpoint for users, and so the person who is playing a game with their children doesn't have to jump out of context, although their kids might be a little disappointed if they have to pause the game for a second. I'm also excited about the hardware and software innovation that it represents for Microsoft overall. I think that we've gotten some really good feedback from both the press and from customers of how game-changing Kinect is. It's not just about emulating what somebody else does, it's about phenomenal innovation for Microsoft.

And I think if you think of the body of knowledge that is represented in Kinect, and the ability to think about some of those scenarios for information workers as well, you can kind of let your mind wander and think about some really cool breakthrough scenarios that are possible when we take that body of knowledge and think about it in the context of information workers. So, I'm just as excited about the future that it represents as I am about the functionality we're delivering to customers now.