Microsoft's strategy for online success
Published: 10 Sep 2007 15:33 BST
On the PC, Microsoft may not be writing every program that people use, but by controlling the operating system, the company has maintained a dominant position.
The company is in the early stages of trying to carve out a similar role on the internet. To do that, Microsoft is not just branching out, but also reaching out to make itself more compatible with rivals.
"When you talk to people who are heavy internet users, they don't all use just one service from one company," Microsoft corporate vice president Chris Jones said in an interview this week. "They end up using a smattering of services."
For sure, Microsoft would like to have people use its webmail service, its instant-messaging software and its blog software, but what it wants most is to ensure that it has some central role for the vast majority of web surfers.
Of course, Microsoft is not alone in this pursuit. Google and Yahoo, and potentially others, also covet such a role. And in many cases, rivals have the early lead.
Microsoft is trying to strike back by building on its strength — Windows. While its first products were browser-based services and largely a rebranding of existing MSN products, the company's latest products are desktop programs. They are also more open. Windows Live Mail, for example, works particularly well with a Windows Live Hotmail account, but also can be used with other webmail services.
Directions on Microsoft analyst Matt Rosoff said he expects this to become a model for Microsoft as time goes on. "I don't think we've seen anywhere close to the end of these," he said.
Microsoft's newfound openness is evident in several other pieces of the company's strategy.
When you talk to people who are heavy internet users, they don't all use just one service from one company. They end up using a smattering of services
Chris Jones, Microsoft
For those who do like the Windows Live services on the web, the company is making sure they are accessible from non-Microsoft devices as well. The company recently struck a deal with Nokia to make Microsoft services accessible from its smartphones.
And, as it tries to take on Adobe's ubiquitous Flash with its Silverlight platform for web developers, Microsoft is again hoping to be seen as open, announcing this week that it will add support for Linux, in addition to Windows and the Mac.
The idea is that, at some point along the way to the internet, Microsoft — and therefore its ad engine — touch nearly everyone. Of course, this is a bit harder to achieve than it has been on the desktop side.
In some cases, Microsoft is hoping that it can move into markets where it is not already a strong player, largely by aggregating the efforts of others. Social networking is one area where the company has discussed such a role.
Jones again hinted at this, saying that, in the real world, he has many different social networks and that he expects the same to be true on the internet. "I'll probably be involved in many and what I'll want to do is make it really easy to stay in touch with all of them," he said. "And so, how can we build software services that help?"
In some cases, Microsoft is also looking to link its existing tools with the social networks, such as a deal with Bebo to use Microsoft's contacts and instant-messaging technologies. The contacts part of the arrangement means that on Bebo there will be a secure way for Windows Live users to bring their contacts over to the social network. That contrasts with many social-network sites that just ask for your email account name and password.
Providing the basics
Beyond such one-off deals, Microsoft is eyeing a role at providing some more basic services, such as sharing and accessing files. Windows Live Photo Gallery, a Windows application that went into public beta testing this week, is an example of a starting point for photo storage, but Microsoft has its sights set higher.
"Over time you'd like to have the service so that all your photos were available from any device, not just the ones you put in your photo album, and that it was easy to have those things backed up, to have them with the resolution you want, and then to have very collaborative experiences with pictures," Jones said. "So, you can see with photos we've taken a big step in this release of Windows Live, but we've got more to do."
The same goes for file sharing, Jones said. "We have a cloud-based way to do file sharing called SkyDrive, and then we have a peer-to-peer based way to do it called FolderShare," Jones said. "Well, over time, it might make sense for us to really start to make that experience be seamless, so you could get to all your files from anywhere."
Those two are just the first pieces in what Microsoft hopes will be an entire Live infrastructure that developers can write on top of, much the way they write programs that run on top of Windows today. It's a notion that some have dubbed a "cloud OS".
Such services are going to take massive amounts of storage space, which Microsoft also believes will eventually lead to a battle between only a few large companies for many of these core infrastructure pieces.
But, as it pursues these different strategies, clashes among different parts of Microsoft seem inevitable. Silverlight, the Windows Live services team and the Live infrastructure group are all trying to be web platforms of one sort or another.
And even the browser is a tough one for Microsoft. The company doesn't want to lose potential users of its services by not supporting Firefox, but Internet Explorer market share helps strengthen Windows.
"It gets to 'What is the goal of Windows Live?'" Rosoff said. "You want the most audience for the services, but you want to maintain the importance of Windows, and Internet Explorer is a part of Windows. There are some conflicts with the entire online services strategy," Rosoff said.
But internal conflict is part of Microsoft's way of doing business. Rosoff notes that the Windows Media Center, Xbox and Internet TV groups all are aiming to be the centre of the digital living room.
"To some degree that's the way Microsoft has always worked," Rosoff said. "They've always allowed technology to compete and not necessarily picked a winner."
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