The bright new Internet world of web-based services and open APIs delivered by Google and others just had a big shadow cast across it by Microsoft. Several news outlets like the Wall Street Journal got a leaked copy of a Microsoft internal email from Bill Gates…
…to executives and engineers, along with a memo from newly minted CTO Ray Ozzie.
After some digging, Dave Winer obtained copies of both documents. In the Gates email, he recounts a 1998 meeting where a “vision” of software becoming more of a service was discussed. Seven years later, the company will focus even more on that vision:
We will build our strategies around Internet services and we will provide a broad set of service APIs and use them in all of our key applications.
This coming “services wave” will be very disruptive. We have competitors who will seize on these approaches and challenge us – still, the opportunity for us to lead is very clear. More than any other company, we have the vision, assets, experience, and aspirations to deliver experiences and solutions across the entire range of digital workstyle & digital lifestyle scenarios, and to do so at scale, reaching users, developers and businesses across all markets.
Ozzie makes a similar observation in breaking down why services are important now:
It is now 2005, and the environment has changed yet again – this time around services. Computing and communications technologies have dramatically and progressively improved to enable the viability of a services-based model. The ubiquity of broadband and wireless networking has changed the nature of how people interact, and they’re increasingly drawn toward the simplicity of services and service-enabled software that just works’.
Also, Ozzie acknowledges where the competition has managed to exceed Microsoft in several areas, most notably Google with search:
…We knew search would be important, but through Google’s focus they’ve gained a tremendously strong position…For all its tremendous innovation and its embracing of HTML and XML, Office is not yet the source of key web data formats – surely not to the level of PDF. While we’ve led with great capabilities in Messenger & Communicator, it was Skype, not us, who made VoIP broadly popular and created a new category….
And while we continue to make good progress on these many fronts, a set of very strong and determined competitors is laser-focused on internet services and service-enabled software. Google is obviously the most visible here, although given the hype level it is difficult to ascertain which of their myriad initiatives are simply adjuncts intended to drive scale for their advertising business, or which might ultimately grow to substantively challenge our offerings. Although Yahoo also has significant communications assets that combine software and services, they are more of a media company and – with the notable exception of their advertising platform – they seem to be utilizing their platform capabilities largely as an internal asset.
Ozzie goes on to note in the lengthy memo three “key tenets” driving changes online, and all three relate to services: ad-supported economic models, delivery and adoption of new services via grass roots efforts, and a demand for experiences that “just work.”
Now, Microsoft will have to deliver beyond its demos of Windows Live and Office Live, and particularly in search and advertising. Time will tell if their shift in focus proves successful, or if they remain a step behind Google and others.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
