Microsoft is betting big on the cloud, and nowhere will that be more apparent than in changes coming to the company's staple Office franchise, CEO Steve Ballmer said Thursday.

"This is the most mainstream thing for Microsoft" in terms of cloud computing, Ballmer said during a speech at the University of Washington, in Seattle.

"We're really taking Microsoft Office to the cloud, letting it run in the cloud, letting it run from the cloud, helping it let people connect and communicate and express themselves," Ballmer said.

"That's one of the core technical ambitions behind the next release of our Office product, which you'll see coming to the market this June," said Ballmer.

Microsoft has said that access to Office Web, which includes versions of Word, PowerPoint, Excel, and OneNote optimized for the cloud, will be available to Microsoft's enterprise subscription customers at no additional charge to the client version.

And consumers will be able to access Office Web entirely for free through Microsoft's Windows Live portal, if they sign up.

"We're betting our company and everybody else in the tech industry is betting their companies on it," Ballmer said of cloud computing, a new-wave computing architecture in which businesses and consumers access applications from the Internet instead of storing them on their PC's local hard drives.

"The amount of innovation that needs to happen is high," said Ballmer.

Microsoft also plans to give its corporate customers the option of hosting the Web-based version of Office 2010 on their own servers in order to give them more control of the product.

Office Web will be part of the Office 2010 general release, which also includes the standard, client-based versions of the software.

Among the enhancements over previous editions are beefed up video and image processing tools that let users edit photos and videos from within their Office documents, and new collaboration capabilities that allow multiple users to access and edit a single document over the Web.

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