Microsoft Serves Up Internet Services Live

Updated: The software giant is promoting a renewed focus on services delivered over the Internet as it tries to fend off challenges from Google and other competitors.

SAN FRANCISCO—Microsoft on Tuesday unveiled a renewed focus on services delivered over the Internet, as it tries to fend off challenges from Google and other competitors. The company showed a pair of "Live" portals offering application services aimed at small businesses and consumers.

To a large degree, the new initiatives from Microsoft Corp. made public here were expected, although the nitty gritty of the details had been tightly secreted away. Microsoft has always seen an opportunity to distribute its services through an online environment, where it is less expensive to do so and cheaper for consumers.

"The kind of software were talking about today remembers what the user wants so when the user shows up, their profiles, their preferences, those things most important are brought down onto their device," Microsoft Chairman Bill Gates said. "The term weve used is live software. Microsoft as a company is making a bet on this, and how this brings opportunities for partners of all types."

This is a departure from Microsofts historical way of offering services: usually licensing the applications to computer manufacturers or selling them to consumers on discs. But its a necessary step to take, Gates said Tuesday.

Analysts suggest that Microsofts new direction is a response to arguably its biggest immediate challenger of the moment, Internet search giant Google Inc. Over the last few years, Google has amassed its own extensive lineup of online services such as instant messaging and e-mail. Google also plans an online retail community to rival Net pioneer eBay Inc.

During a two-hour event here, Gates unveiled two new initiatives involving "live software", which were dubbed Windows Live and Office Live.

Windows Live, Gates said, is an Internet-based personal service mimicking Microsofts popular MSN portal. The difference is "you can connect to that digital world as you move from one personal computer to another," and it includes new communication, information sharing and security.

Windows Live is a version of popular Internet portal MSN on steroids, and includes Microsofts trademark Internet search service.

But Windows Live, which is free like MSN, has a number of new features such as a potential replacement for Microsofts free Hotmail e-mail, called Windows Mail, and a "Windows Live Safety Center," which shows the health of your PC on the Web page.

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Theres also a new version of Windows Messenger, Microsofts Instant Message client, which increases potential buddies from 300 to 600. It also automatically updates contact information and lets you view the list of your buddies friends, if they so choose.

Also unveiled was Office Live, a version of Microsofts office suite of messaging, presence, automation and collaboration, designed to supplement Microsoft Office, which will be initially targeted at SMBs (small to midsize businesses), Gates said.

Another example cited here Tuesday involved Xbox Live, Microsofts online gaming service, including incorporating a users own photos.

Microsoft already sells a number of software services, both paid and free. Leading up to Tuesdays announcement, Microsoft officials had hinted at other potential offerings in the pipeline, including both consumer and enterprise versions of the Windows OneCare hosted security services, as well as a hosted Microsoft CRM service, akin to what sells today.

Prior to the Microsoft services launch, partners had hinted of a couple of new services they expected Microsoft to unveil in the near term.

Among those closest to commercialization: A new small-business bundle of VOIP (voice over IP), instant messaging and data conferencing that Microsoft has discussed privately with some of its partners, as well as a managed, high-availability Exchange Server offering.

Partner sources said earlier this year that they expected the hosted SMB bundle to include e-mail, unified messaging, instant messaging, VOIP and data-conferencing capabilities, all rolled into a single, hosted collaboration suite, partners said.

Some of these services may be part of the newly unveiled Office Live offering. Microsoft officials did not make clear by the time this article went to press whether the rumored small-business bundle was one of such planned deliverables.

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Another rumored hosted service on tap from Microsoft: A hosted backup-and-restore service, designed to offer SOHO (small office/home office) and consumer customers the opportunity to have Microsoft back up their personal files on CD and/or DVD. Users also will be able to back up financial files, legal documents, digital photos, online music and home videos, and even put their most important files into a "digital safe-deposit box," hosted by Microsoft.

Again, it was unclear by the time this article was published whether Windows Live includes some or all of these storage services.

Microsoft also has mentioned publicly its plan to build up its stable of managed services. Company brass have acknowledged the existence of a hosted desktop deployment/management service, code-named "Energizer." And company officials said earlier this year that Microsoft also was strongly considering some kind of Exchange services bundle that would include bits, services and methodology for helping users to manage Exchange at a "four nines" (99.99 percent) availability level.

Editors Note: This story was updated to include additional information about Windows Live and Windows Messenger.

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