The latest version, which Mundie demonstrated in a prerecorded demo, shows a monitor placed outside the door of an office. Someone walks up to the office and the face on the screen wakes up, greeting the person and asking if he'd like to talk to Eric, who works in the office. She informs the visitor that Eric is in a meeting and offers to schedule some time for him to meet Eric. After the visitor swipes his badge, she compares his and Eric's schedules and finds a time for them to meet.

Microsoft has learned some things about the requirements of such an application, were it to be commercially offered. When idle, the application uses 40 percent of the compute power of the machine, because it is constantly aware of its context. "That makes it so clear to me that this will have to be built on a hybridized client plus cloud architecture," Mundie said.

Microsoft often talks about combining local computing with Internet based computing. The concept, which works well for Microsoft because of its business model based on software sales, is slightly different from Google's vision which relies more on remote hosted services.