"As the online application world develops, we could see some interesting effects around security and privacy," King says. "How that all shakes out over time is going to be very interesting."

Ultimately, though, if developers do their jobs well, casual users may not even notice the difference.

"At the end of the day, consumers want the service, they want the application. Where it resides -- whether it resides on their individual client, or resides online, or resides on a server someplace -- doesn't really matter to them," King says.

Specific details about Windows 7 are expected to be revealed Tuesday. No release date or pricing information has yet been discussed for Azure.