isn't it clear that MS has a vested interest in applications being loaded fresh from the internet?That's the thing... fat client has made MS a lot of $$$, but they've shown great ability to change direction quickly to stay in the game. E.g. the early days of the internet and browsers. If BG is saying things that aren't the most convenient outcome for MS, then it must be well underway.
As for caring where data is stored: where are the details of your bank balance stored? ;-) I think that's the model seen by MS except it extends into many more spheres than banking. FWIW it's not their first attempt in this area; remember the Hailstorm initiative? More recently they've bought into ideas like HealthVault that some people say is years away, but check out
http://www.healthvault.com/Applications/
"... They ne'er cared for us
yet: suffer us to famish, and their store-houses
crammed with grain; make edicts for usury, to
support usurers; repeal daily any wholesome act
established against the rich, and provide more
piercing statutes daily, to chain up and restrain
the poor. If the wars eat us not up, they will; and
there's all the love they bear us."
-- Shakespeare: Coriolanus, Act 1, scene 1
