Update on Microsoft’s early November “Live” announcement

On November 1, Microsoft unveiled its software-as-a-service strategy. This hearkens back to Microsoft’s original announcement of .Net five years ago, when it was unclear what .Net was but there were intimations that you’d be able to use Office online through a browser.

So, five years later, they’ve gotten there. Sort of. It’s probably a necessary strategy. Google scares the bejeezus out of Microsoft and there have long been rumors that Google is working on an Office-like suite you could access online—even having the guts of your operating system online so that all you’d need is a browser and some good hardware with a little (Linux?) OS to boot up and get online. Clearly Google is trying to take on Microsoft by making the features and applications people want accessible through the Web.

The key to all this has been Ajax and other development technologies that make browsing more like working on your PC. The concept behind a technology like Ajax is that it makes websites “richer” and more “application-like.” The reason applications rose to prominence was that they were instantly available and very rich, because they had all that local horsepower to drive them. Then the Web came along and it was compelling but its limitation has always been its click-and-wait architecture. Pages take longer to load and all the horsepower in the world on your PC can’t get the data across the wire and all those routers any faster than what we currently experience, which is a lot less instant and rich than applications.

Now, Ajax and other technologies have used clever ways to make Web browsing richer, more instant and with far more features. There will be fewer “pages” to click through and when you click to ask for something, you’ll get it the way you got it in an application: nearly instantly. There are young, developing versions of productivity software done through Ajax online (Zimbra has an e-mail/calendaring system). There are online word processors and even a page where you can do all your Instant Messaging right in the browser through Ajax. If you go to the Wikipedia page for Ajax, there’s a long list of pages that have developed tools like this.

Here’s something else no one—neither Microsoft nor Google—has figured out yet. If this “rich Web” takes off, what happens to online ad revenue? Already a massive number of users block ads on the Web. Now come along rich Web applications and those will require fewer page click-throughs—instead the information you demand is loaded dynamically into the page you’re looking at rather than going through the trouble (and time) to load a whole new page. So now, an ad business based on click-throughs, in which many people are already blocking those ads out, has fewer pages in which to load ads. It’s not clear how ad revenue will be affected by these technological changes and it’s even less clear if the ad revenue Microsoft is counting on to supplant its subscription fees can match those notoriously high licensing revenues they’ve garnered from Windows and Office over the years.

So from a technical standpoint, Microsoft’s announcement is only mildly interesting—they’re joining a developing game (sooner than they joined the Internet game relative to those competitors, no doubt, but still it’s not “innovative” on Microsoft’s part, per se). It’s more interesting that it’s this big huge company (well, one besides Google) doing this instead of some little start-up.

And it’s most interesting to see how they work out the business model. Office online is easy to understand. But why do I want to pay those massive license and subscription fees to get stuff through a browser when all these other people (Google, Zimbra etc.) will offer me similar functionality without that Windows layer or Windows prices? Why would I buy Windows at all if all I need is a browser to get Office or other productivity software, my chat client, and my email? If it’s done over the web, it’s much more cost effective for me to get a Linux box (no license fee) with a Firefox browser (free/no license fee) and a ton of horsepower. (Note: this Windows Live thing doesn’t support Firefox yet—will it? If not, then this is a new lock-in strategy).

Microsoft, like I said in the sidebar, is counting on our inculcation. We’re used to Windows and Office, how they work, look and feel. They are hoping we won’t switch to less expensive, possibly less functional, and certainly less used Web services that do the same thing as theirs, simply because we’re used to theirs.

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Jim Love, Chief Content Officer, IT World Canada

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