Microsoft embraces Software as a Service with "Live"

Bill Gates and Ray Ozzie announced yesterday a major shift in Microsoft strategy towards web based applications supported by advertising and subscription business models. More analysis from Business Two Zero will follow, but first some of the facts. These words from Eric Auchard at Reuters (or read the full story):

Outlining what it said was its biggest strategy shift in five years, the Redmond, Washington company told a meeting of analysts and reporters that it would deliver many of its key products and services as online services as well as selling subscriptions or licenses for software installed on computers.Windows Live and Office Live will give users some of the basic features of the software giant's two most-profitable products, but without the complexity of installing and maintaining the software in computer hard drives."We are trying to put a 'services plus software' mentality into many many of the product groups inside Microsoft," said Bill Gates, Microsoft's chairman and chief software architect.Microsoft also said it planned to fold many well-known products in its MSN division into a new brand called Windows Live. The move will combine its instant-messaging service, a new online e-mail service replacing Hotmail, Web security, data storage and other features, all available via the Internet.The software giant is looking to defend its mainstay Windows and Office software franchises by borrowing from ideas used by challengers such as Google, Salesforce.com, WebEx, Yahoo Inc. and scores of start-ups.

Analysts attending the meeting said Microsoft demonstrated it clearly grasps how the industry is shifting to deliver software as Web-based services rather than isolated programs. But these moves are preliminary and fragmentary, they said.The new initiative also reflects a recent company-wide reorganization at Microsoft that put MSN under the Windows division and put Ozzie in charge of Microsoft's efforts to deliver software services over the Web.

These words from Yardena Arar, live from the event on Today @ PC World:

Now he's talking about Windows Live and Office Live. The former, Windows Live, is not Windows. Rather, it's "Internet based personal services to bring together your digital world." But Windows Live isn't MSN.com either. It sounds basically like a new Web portal.Office Live sounds similar, but business focused and easy to integrate with Microsoft Office (but you don't need Office to use Office Live). Some of these Live services will be free, others will be subscription-based. Gates explained that the Live platform will help Microsoft deliver a broad range of technologies to users.

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