Microsoft Corp. has "dramatically" changed because of open-source software, Chief Software Architect Ray Ozzie said Thursday as part of a wide-ranging discussion during the company's annual Most Valuable Professional summit in Seattle. He also talked about Microsoft's mesh concept and the importance of virtualization.

"Microsoft fundamentally, as a whole, has changed dramatically as a result of open source," Ozzie said. "As people have been using it more and more, the nature of interoperability between our systems and others has increased." As a result, when Microsoft begins developing new products, it considers from that state what components it will want to open up to outside developers, he said.

Still, that doesn't mean Microsoft is changing its approach to business.

"We have a software business that is based on proprietary software. We tactically or strategically will take certain aspects of what we do and open-source them where we believe there will be a real benefit to the community," he said.

He pointed to Microsoft making the .Net framework open source as an example.

Ozzie also spoke a bit about the company's vision for using the Web to connect devices and content, in what may foreshadow a Microsoft announcement planned for next week.

"The Web really is a hub. It can be viewed conceptually as a hub for a social mesh and device mesh," he said. Using the Internet as a hub for a social mesh means people can connect a wide range of online content like information they tag and rank, content they publish and information they subscribe to, he said.

Ozzie's vision could hint at a service, Live Mesh, that Microsoft plans to unveil on Tuesday. The company has not revealed any details about the offering except to say it will be unveiled next week during the Web 2.0 Expo in San Francisco. Ozzie briefly described a similar mesh vision earlier this year at the Mix '08 conference.

Microsoft already offers an online sharing service, SkyDrive, which is still in beta. SkyDrive is an online storage system that users can access from their PCs and from any other device with a browser, like a smart phone.

Beyond content, the Internet can also serve as a hub for devices, Ozzie said. "From a device standpoint, the Web can be a hub in terms of bringing devices we have together," he said. While enterprises often connect and manage thousands of computers in a business, individuals have a variety of devices such as phones, PCs, media centers and music players that are mostly unconnected, he said.

Microsoft has already done some connecting of devices, including a service that lets Xbox and Zune users share media between the devices via the Web.

That model can also be extended to broaden the way enterprises connect devices, he said. For example, a mobile user could take a photograph and use the picture in a project he is working on via a PC and the Web, Ozzie said.

Ozzie also touched on two other principles guiding the work at Microsoft, including getting the mix of software and services right, and moving away from "monolithic" programs to fragmented pieces of software that end users can choose as appropriate.

Virtualization is another area that Microsoft thinks will be increasingly important. "Within the enterprise, virtualization is the simplest and most straightforward way to make the best use of data center resources," he said.

Ozzie also praised the work the MVPs do in providing feedback to Microsoft. The software industry "used to be so supply constrained," he said. "You could build almost anything, and there'd be an audience waiting for it." Today, however, there's an abundance of software and services that users can choose from. That means Microsoft's challenge is to better understand what users want in order to best target their needs, he said.

About 4,000 technology experts make up Microsoft's MVP program. Nearly 1,800 of them met this week in Seattle at an annual summit.