Gates Memo: Weve Got to Get This Services Thing Right

Microsoft's chief software architect tells Microsoft's top execs, "The next sea change is upon us." Read the full text of his memo here.

On Nov. 1, Microsoft Corp. Chairman Bill Gates and Chief Technology Officer Ray Ozzie unveiled publicly Microsofts Live.com services strategy. The pair previewed for press and analysts in San Francisco a number of repackaged Windows services, branded Windows Live, and previewed their intentions to roll out a parallel set of Office services next year that they will brand Office Live. Industry watchers were of mixed opinion about Microsofts plan. Some questioned whether Microsofts new offerings would help the Redmond, Wash., software maker better compete with competitors, ranging from Google to Skype. This week, copies of memos about Microsofts planned services push—sent by Gates and Ozzie to Microsoft top management the day before Microsofts services launch—leaked to the Web.

Microsoft Watch obtained a copy of the Gates memo. The text of it follows: Microsoft has always had to anticipate changes in the software business and seize the opportunity to lead. Ten years ago this December, I wrote a memo entitled The Internet Tidal Wave which described how the internet was going to forever change the landscape of computing. Our products could either prepare for the magnitude of what was to come or risk being swept away. We dedicated ourselves to innovating rapidly and lead the way much to the surprise of many industry pundits who questioned our ability to reinvent our approach of delivering software breakthroughs. Five years ago we focused our strategy on .NET making a huge bet on XML and Web services. We were a leader in driving these standards and building them into our products and again this has been key to our success. Today, over 92% of the Fortune 100 are utilizing .Net and our current wave of products have XML and Web services at their core and are gaining share because of the bold bet we made back in the year 2000. Today, the opportunity is to utilize the Internet to make software far more powerful by incorporating a services model which will simplify the work that IT departments and developers have to do while providing new capabilities. In many ways this is not completely new. All the way back in 1998 we had a company meeting where we outlined a vision in which software would become more of a service over time. Weve been making investments since then—for example, the Watson service we have built into Windows and Office allows us and our partners to understand where our users are running into problems and lets us improve their experience. Our On-line help work gives us constant feedback about what topics are helping our users and which we need to change. Products from MSN like Messenger and Hotmail are updated with new features many times throughout the year, allowing them to deliver innovations rapidly. Our Mappoint service was a pioneer in letting corporations connect up to a web based API on a subscription basis. However, to lead we need to do far more. Read the rest of Gates memo on Microsoft Watch: Gates Memo: Weve Got to Get This Services Thing Right