its Windows operating system to software delivered through the
Internet, Brian Hall, a Microsoft executive said.
The strategy is a major departure for a giant software firm that sells
packaged software that runs on the personal computer. Microsoft
designed the strategy to help shield its hundreds of millions of
software customers from competitors, from Salesforce.com to Google,
who already offer software applications over the Internet.
Microsoft's new Windows Live software includes an electronic mail
program, a photo-sharing application and a writing tool that is
designed for people who keep Web logs.
The new service is an indication that Microsoft plans to compete
head-on against its rival, Google, and others, and not just in the
search-engine business where it is at a significant disadvantage.
Instead, industry executives and analysts said, Microsoft would try to
outmaneuver its challengers by becoming the dominant digital curator
of all of a user's information, whether it is stored on a PC, a mobile
device or on the Internet.Millions of PC users already rely on Web
applications that either provide a service or store data. For
instance, Yahoo and Google have popular e-mail programs and
photo-sharing sites that are accessible through a Web browser. The
photos or the e-mail are stored on those companies' servers, a system
that the computer industry calls cloud computing. The data are
accessible from any PC anywhere.
Hundreds of companies in Silicon Valley are offering every imaginable
service ranging from writing tools to elaborate dating and networking
systems, all of which require only a Web browser and each potentially
undermining Microsoft's desktop monopoly. Google, the most visible
example, took cloud computing a step further last October and directly
challenged Microsoft by offering a suite of free word-processing and
spreadsheet software over a browser.
"To the extent that the industry is moving toward an on-demand
business model, it poses a threat to Microsoft," said Kenneth Wasch,
president of the Software and Information Industry Association and a
longtime Microsoft adversary.
Microsoft is a late entrant into a set of businesses that are largely
defined as Web 2.0, but the company is counting on its ability to
leverage its vast installed base of more than one billion
Windows-based personal computers. It plans to give away some of its
services, like photo-sharing and disk storage, while charging for
others like its computer security service and a series of
business-oriented services targeted at small and midsize
organizations.
"I think Microsoft is going beyond search to a more sophisticated set
of services," said Shane Robison, chief strategy and technology
officer at Hewlett-Packard. "It will be a race and who knows who will
get there first?"
Hall, general manager for Microsoft's Windows Live services said the
company was "taking the communications and sharing components and
creating a set of services that become what we believe is the one
suite of services and applications for personal and community use
across the PC, the Web and the phone." He said the software to be
released this week would be the first full release of Windows Live
that is intended to produce a "relatively seamless" experience between
the different services and applications.
Windows Live services also underscore Microsoft's desire to become the
manager for a user's data wherever they are located. Although they
will not be included in the initial test release, the company's
recently announced SkyDrive online data storage service that currently
gives test users 500 megabytes of free Internet storage and its
FolderShare service that makes it possible to synchronize between
multiple computers - including Apple's Macintosh - transparently are
being folded into Windows Live.
"When you think storage, think Windows Live," Bill Gates, the
Microsoft chairman, said this summer. Microsoft is moving to create an
experience that will divorce a user's information from the particular
device they are working with at any moment, he said.
Microsoft's new approach is in many ways a mirror image of the
strategy used during the 1990s in defeating Netscape Communications
when that start-up threatened Microsoft's desktop dominance.
Microsoft attempted to tie the Internet to Windows by bundling its
Internet Explorer Web browser as an integral part of its desktop
operating system. The company lost an antitrust lawsuit in 2000
brought by the U.S. Justice Department in response to this bundling
strategy.
Today that strategy has been flipped with the growing array of Web
services that are connected to Windows. But the new approach, which
Microsoft refers to as "software plus services" is once again
beginning to draw complaints of unfair competition from competitors.
--
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