It took a while, but Microsoft Corp. executives finally got the memo. After years of talk about software as a service from customers, competitors and industry experts, Microsoft is now officially embracing the coming revolution.
In a pair of recent e-mails written by Bill Gates and Chief Technical Officer Ray Ozzie, they proclaimed a new era of software services. "
We must respond quickly and decisively," wrote Ozzie. "It's clear that if we fail to do so, our business as we know it is at risk." Gates was no less apocalyptic: "The broad and rich foundation of the Internet will unleash a 'services wave' of applications and experiences available instantly over the Internet to millions of users. . . . This coming 'services wave' will be very disruptive."
The most visible early example is Google Inc.'s map software, which allows users to scroll continuously across a map without reloading the page. Ironically, Ajax was developed by Microsoft itself.
With Ajax and related technologies, familiar corporate applications—from stock-checking in an enterprise resource planning system, to filling out forms for the human resources department—could be based on hosted software and simple clients that require only a Web browser.
"There is a lot for a CIO to be thinking about," says Forrester Inc. analyst Carl Zetie. "You are looking at an application model that is very easily managed and upgraded, with no deployment costs." There are limits to what these applications can do, but combined with other browser-based applications it's easy to see a future—just a couple of years away, says Zetie—in which much or all of the work done at the desktop will not require local applications, or a powerful operating system.
And that, of course, is a huge danger for Microsoft. "They have a dilemma," says Zetie. "Do they risk creating a client environment that undermines the value of the desktop, and all the control that implies?" But if they don't develop services for this new era, the market could leave them behind. The next release of Windows, he says, "has a lot of sexy stuff in it—but the class of applications for which you need the powerful desktop is shrinking."
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