TECH TALK: Microsoft Live: The Launch

Last week, Microsoft launched its long-awaited software-as-a-service initiative. It is as much a defensive move (to counter the likes of Google and Yahoo) as an aggresive one (to potentially move into new markets, especially in the small- and medium-sized enterprise market). In this weeks Tech Talk, we will summarise opinions from around the Web on Microsofts initiative and then discuss it in the context of emerging markets like India.

The New York Times outlined the services:

Microsoft introduced on Tuesday two new advertising-supported Web services, Windows Live and Office Live, as a direct response to the formidable challenges posed by its major competitors, Google and Yahoo.

The new online initiatives will deliver services to businesses and consumers directly via the Web, in many cases, without the need to download the applications to a computer. As such, they are an important step in extending Microsoft’s reach beyond the desktop PC to smart phones and other Internet-connected devices.

Microsoft executives said that the company intended to take on both Google and Yahoo by making advertising-supported services the core of a broad new Web-based software applications business. Bill Gates, Microsoft’s co-founder and chief software architect, said Tuesday that new Internet-based technologies were creating an era of “live software” that will change the software industry and transcend the boundaries of any particular computer or mobile device.

“Every five years or so we look at our strategy and make these big bets,” he said.

The Wall Street Journal wrote:

The new offerings are an attempt by Microsoft to tie its biggest software franchises to the rich pool of online advertising that has fueled the growth of companies like Google, the Web-search giant. Microsoft has built its fortunes on licensing its software to corporate customers and selling it preinstalled on personal computers.

But a relatively small amount of its revenue flows from online advertising; a market that one Microsoft executive said could grow to $150 billion by 2015 from $15 billion today.

Microsoft is offering most of the new services free, hoping that advertisers will support them by buying banner ads displayed on the Office Live and Windows Live services.

Each of the services can match ads to Internet users’ interests and Web activities. For instance, if a Windows Live user has his personalized Web site set to include information on cycling, software can direct ads for cycling gear to the site.

Tim OReilly commented in the New York Times article: “It’s back to 1995 where the Internet was this great rallying cryOne of the areas where Microsoft has a lead is that they are focusing on non-PC devices. That may be one of their secret weapons.”

Dan Farber wrote:

In opening the event, Bill Gates said that every five years Microsoft looks at its strategy and makes big bets1990 was Windows, the Web in 1995 and Web Services .Net in 2000. The next big bet, Gates said, is delivering a new type of software experience, called “live software.” It’s about connecting users at the center, with relationships with people, data people care about, applications and all devices coming together to do things for you, Gates said. It’s a way to think through the user experience, a fusion of software and services, with capabilities across the Internet, enabled by the broadband, wireless, low cost storage, a multitude of devices, the march of Moore’s Law. Sounds like a bit of Web 2.0 mixed with Microsoft’s live naming themeLive Meeting, XBox Live. Services = Software, in a broad way, from hosted services like email and CRM to MSN and mapping mash-ups.

Another post: Bill Gates and Ray Ozzie demonstrated (actually the demos were full of glitches) that Microsoft taking its learning from MSN, bCentral and competitors to turn the ship around services. It’s not about technologyGoogle, Yahoo and Microsoft are playing leapfrog. It’s about having a Web platform that doesn’t require Windows or Office and garnering ad (Microsoft’s forthcoming adCenter) and subscription dollars. It’s also about being a hub for deep engagement with users and user generated content.

Microsoft announced 22 business applications for small businesses as part of its Office Live offering. has more: Microsoft provided a list and even grouped them by category. Four are aimed at keeping track of customer data: accounts, business contacts, opportunities and customer support. Two are for handling projects: a project manager and a dashboard. Five are sales tools: applications for campaigns, collateral, a competition tracker, product and service items and estimates. Employee-related tools account for another five, including an employee directory, an expense-monitoring tool, jobs and hiring, training and work hours. The final six are company-wide tools, labeled as: calendars, company assets, company events, company holidays, documents and tasks.

Tomorrow: Analysis

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Rajesh Jain

An Entrepreneur based in Mumbai, India.