Microsoft Claims Readiness for Web 2.0

A memo written by Microsoft Corp. Chief Technical Officer Ray Ozzie sheds more light on directions in which Microsoft already has been moving to ensure it doesn’t miss the opportunity of the next generation of Web-based services, what industry analysts have dubbed “Web 2.0.”

In recent months, Microsoft has showed that future versions of Windows and Office will support collaboration and personalized desktop services, based on a new business model that leverages ad sales and recurring services revenue, that have turned the company’s most daunting rival Google Inc. into the darling of Wall Street. (Google’s stock price closed at US$379.15 Wednesday.)

Rather than reflect a sea change for Microsoft, however, as some reports have said, Ozzie’s memo, viewed by the IDG News Service Wednesday, merely reinforces strategic moves the company has been slowly unfolding for several months.

The memo, embedded in an Oct. 30 e-mail sent by Microsoft Chairman and Chief Software Architect Bill Gates to Microsoft executives and engineers, proves that the company, which has shown a reluctance to let go of its software legacy, is finally ready to take decisive action to adapt to current industry changes. It’s something Microsoft has had to do all along in varying degrees, said Michael Gartenberg, vice president and research director with Jupiter Research.

“Microsoft withstood an awful lot,” Gartenberg said. “First it was the Web, Internet applications [and] Netscape, then cell phones and Linux, and now it’s Web 2.0. We’ve come full circle. Microsoft has already proven they can weather the storm, so you have to assume they’re going to play in this game.”

Gartenberg said that a popular misconception about the rivalry between Microsoft and Google is the idea that Google must fail in order for Microsoft to succeed. “That’s not the way the world is working,” he said.

Microsoft already has many of the tools to continue to grow even as Google guns for it, he said, but the software company is not moving quickly enough. Now Microsoft’s challenge is to turn its successful software products into a seamless services platform, something Ozzie calls for in his memo.

For example, one of the key plans for the Microsoft Business Division, according to the memo, is to extend Office so it can easily connect up to other applications. Microsoft already has said it would make standard XML (Extensible Markup Language) the default file format for the next version of the productivity suite, code-named Office 12, a move that could make it easier for other applications to communicate with Office for the creation of services.

“What should we do to bring Office’s classic COM-based publish-and-subscribe capabilities to a world where RSS and XML have become the de facto publish-and-subscribe mechanisms?” Ozzie questions in his memo in a section that describes the notion of “Connected Office.”

Microsoft also has revealed plans to include RSS, or Really Simple Syndication, as a thread running through multiple applications in the next version of its operating system, Windows Vista. Vista is scheduled to be available at the end of next year.

Rather than simply steal a page out of Google’s playbook and offer free, ad-based services like the ones Microsoft launched last week, Windows Live and Office Live, Microsoft is planning to use its existing software as a platform on which its massive developer community can build new services to offer customers, analysts said

“Ad-supported software for consumers and very small businesses is only the beginning,” Charlene Li, a Forrester Research Inc. analyst, wrote in a research note released last week. “Microsoft’s real aim is to build and host a service platform that will attract the investment of developers looking for a way to reach these market sectors.”

Ozzie’s memo reflects as much. He introduces the concept of a “seamless OS” that is designed for “today’s multi-PC, multi-device, work anywhere, Web-based world.”

He also wrote that the company must focus on enabling “seamless productivity” so customers can “create, find and organize documents and data among all the desktops, devices, servers and services to which you have access, and with all the others with whom you need to work, through ’shared space’ products that are Internet service-based, enterprise server-based and directly peer-to-peer.”

However, one thing Microsoft must do to sell developers on this vision is to overcome a perception within the Web 2.0 community that it is slow to innovate and is inflexible when it comes to what tools can be used to develop on its platform, Li wrote.

Indeed, one of the things that has posed a problem for Microsoft is the speed with which Google has been able to deliver Web-based services and derive revenue from them. Microsoft, being a much larger company with a legacy customer base, is not able to change gears or deliver new services as quickly as the smaller, more agile Google. However, this does not mean Microsoft will get left in the dust, Gartenberg said.

“A company like Microsoft takes longer to do things, but that doesn’t mean Microsoft is asleep at the wheel any more than they were in 1996,” he said.

Ozzie acknowledged in his memo that Microsoft must be more supportive of lightweight development technologies such as REST (Representational State Transfer) JavaScript and PHP (PHP Hypertext Preprocessor) that developers find easy to use for quickly building new applications.

Microsoft is not just getting its technology in line with its services vision. The company also is taking steps to make its licensing more compatible with a services model, analysts said. Microsoft has said that enterprise customers will need to buy its Software Assurance service along with Windows Vista, when it ships next year. This shows that Microsoft plans to drive a model where customers pay regularly for access to a network of software updates rather than a packaged product, analysts said.

By Elizabeth Montalbano – IDG News Service (San Francisco Bureau)