2 November 2005 Microsoft has announced it will offer free web-based services to accompany its Windows and Office software in a move intended to combat online rivals such as Google.
Spurning the established IT industry parlance of “software as a service”, “on demand” or “hosted applications”, Microsoft has instead coined its own buzzword: “live software”. Windows Live and Office Live are described as “enhancements” to their desktop siblings, blurring the dividing line between Microsoft’s software and services.
Windows Live takes the operating system’s brand but little of its technology, bringing together many existing elements of Microsoft’s online consumer services, currently under the MSN brand, into one portal. These include email, instant messaging and blogging,as well as security services such as anti-virus.
Office Live is built on Microsoft’s SharePoint software and is aimed at small businesses. The “basic” version, available for free, allows businesses to build their own website and comes with five email addresses. The full version is paid for by subscription and allows spreadsheets and documents to be shared and edited online, alongside more than 20 other applications such as project management and customer management.
“It’s a revolution in how we think about software,” said Bill Gates, Microsoft’s chief software architect. “Every five years or so, we look at our strategy and make these big bets.”
While Microsoft is not about to abandon its desktop stronghold, analysts note that Google is the main target of these new services. Search is central to Windows Live and the site draws on the same “Ajax” web design technology as Google’s Gmail and Maps online applications to mimic the responsiveness of desktop software.
Microsoft hopes to increase revenue from online advertising tenfold over the next ten years by making its services available free but ad-supported. Google currently holds the lion’s share of this market and Microsoft’s previous attempts to increase its presence have failed to make much of an impact.
Until recently, Microsoft relied on Overture, now owned by Yahoo, to provide its Internet-based advertising technology. It has now announced its own search-based advertising engine, adCenter, which is currently being tested in France and Singapore.
Also in Microsoft’s sights are hosted application pioneers Salesforce.com, RightNow and NetSuite, who have grown rapidly by selling subscription-based office services to small and medium-sized businesses.