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TECH TALK: Microsoft Live: Analysis (Part 2)

November 9th, 2005 · No Comments

An News.com article traced the roots of Windows Live to MSN:

The main Live.com Web page is similar to the Start.com page that has been in testing since earlier this year. Windows Live Mail is a long-planned update to Hotmail designed to make the service more like desktop e-mail software. Other existing products, like Microsoft’s MSN Spaces and its OneCare security service, are also joining the Windows Live party.

Windows Live is most certainly not an online version of Microsoft’s venerable operating system, as the name might imply. But the company insists the move is more than a name change.

Indeed, some of the technology that Microsoft demonstrated goes beyond not only what MSN has done, but also what Google and Yahoo have covered in their personalization efforts.

The most striking examples were ways of tying Windows Live to the desktop. On stage, Microsoft showed how people could share file folders with instant-messaging buddies and use the Live.com page to view not only Web content, but also things like recently opened documents or a corporate SharePoint portal.

Charlene Li wrote in a Forrester report: Microsoft has embraced a new way to do business a mindset that is based on software-as-a service, open platforms, and continuous innovation; a model previously mastered by Google. Ad-supported software for consumers and very small businesses is only the beginning. 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. It is also a foray into offering its traditional client/server software to customers on a hosted or on-demand basis. Forrester believes that these “Live” services won’t cannibalize Microsoft’s existing software revenues and instead will drive significant upside as Microsoft develops new advertising and subscription revenues. However, it has tried this before and failed. The strategy will be successful only if Microsoft offers its partners a ready market, a fair revenue sharing scheme, and a strong support system that develops trust.

She also addressed the question of whether this was going to cannibalize Microsofts core software and enterprise revenues? Not anytime soon. Office Live is targeted at a very different audience small businesses with less than 10 employees that today dont buy Microsofts varied enterprise solutions. And they wont anytime soon because they dont a) have the IT resources, and b) they dont need these mission critical solutions. Thats why a hosted solution is ideal for them, and Office Lives initial 22 applications will address many of them.

Charlene also pointed out the developer angle to it. Developers have been Microsofts greatest strength. Charlene notes: I believe Microsoft is fully embracing hosted services and supporting developers, and more importantly, now have different mindset in how they approach the market. Sure, they would still love to be central your personal and work life (that IS what Windows and Office Live are about, after all), but they know they cant do it alone. This is especially true with Google and Yahoo! breathing down their necks. While not yet available, the APIs will allow developers to build on the Live platforms, leveraging all of the communication, payment, and identity systems that have already been built.

Amy Wohl analysed Microsofts offerings for her blog on software-as-a-service:

You will remember that Microsoft often starts out in a new market segment by feeling its way, making small changes from its current product offering and business model, and then making more drastic changes as it gets broad market reaction. It was that way with its entry to the Internet and I suspect it will be that way here, too. That means expect the offering not just to broaden, with lots more features, but also to possibly change. We expect:

(1) More emphasis on small business-oriented services
(2) An effort to attract business partners’ applications
(3) Lots of adjustments between the advertising-based and the subscription-based models to see just what users will pay for directly and how much.

Tomorrow: Analysis (continued)


TECH TALK Microsoft Live+T

Tags: Tech Talk

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