Bill Gates: 'This Is the Live Era'

After aggressively exploring the software-based services space for the past several years, Microsoft has made its commitment official. At an event held for the media and analysts in downtown San Francisco, Microsoft chairman Bill Gates and several colleagues outlined the ways the company plans to incorporate services components into virtually every aspect of its business in a new initiative dubbed Live Software.

Gates compared today's event to a pair of seminal moments in Microsoft's history: its much-hyped conversion to the Internet in 1995 and its .Net migration to XML and Web services in 2000.

"Every five years or so, we look at our strategy and make these big bets," Gates said. "The releases we're showing you today are the full realization of our XML/Web services efforts, and the opportunity to build the new applications wouldn't have been possible without this approach."

He said the "exponential" improvements in hardware -- including lower costs, the increase in the wireless infrastructure and broadband networks, better storage and the persistence of Moore's Law -- have been critical in enabling the services model. Indeed, some of Microsoft's services have been in use for some time, as the 220 million online downloads of Service Pack 2 will attest.

The splashiest part of the event was the unveiling of Microsoft Windows Live and Office Live, complementary services to the operating systems that, Gates said, users can access even if they don't use the software.

"The services are natural complements to Office and Windows," he said. "They don't replace Office and Windows, and the two platforms are not required to use the Live versions, but they provide rich capabilities that let you get more out of those things."

Windows Live is designed to enable developers to build very highly scalable Internet-based personal services. It takes a user-centric approach that's separate from Windows and runs on an advertising or subscription model. Office Live will offer similar functionality for its initial target SMB audience. The MSN.com portal will still be up and running.

"We're taking a lot of what we learned there and moving it over," Gates said.

Microsoft CTO Ray Ozzie later took the stage to explain the thinking behind the Live software model, saying demand for seamless user experiences, the enabling of new delivery mechanisms and the development of new business models centered on advertising are behind the industrywide services push. He also suggested that the services focus will result in more frequent product updates and more developer openness -- two things that have been anathema to Microsoft until now.

"The line between work and home has forever blurred, for better and worse," Ozzie said. "What Internet services can enable you to do has the power to be broadly transformative across the entire industry."

The Windows Live demonstration failed at first, bringing the proceedings to an awkward halt, while the backstage technicians fixed the problem, forcing Ozzie to go into an extended riff on the supposed advantages of the new services.

The techies eventually got the system to work, and the rest of the two-hour presentation featured other (successful) product demos, serving as an illustrative tutorial about how customers and partners can begin utilizing the services capabilities of Microsoft business and consumer solutions ranging from LiveMeeting to the Xbox 360.

Gates said today's news obviously isn't an indication that Microsoft intends to migrate to a services-only model. In fact, the company currently is developing a LiveMeeting server that companies can install on-site as needs dictate.

"That's an example of how this stuff can be used both as a service and an application," he said.

He added that he can envision in the near-term when Microsoft Managed Services tap into wide ranges of nontraditional computing devices, including cars and wristwatches, all with tailored services running on an advertising or subscription business model.

"This affects everybody who uses software," Gates said. "Users are increasingly using digital approaches to do things at home and at work. Our ability to extend (new computing) scenarios out to everywhere we go gets stronger and stronger. Is this completely new? Absolutely not. But making it the centerpiece, the way we think through the experience, that is a big change. This isn't like the late-90s where things happen overnight, but if we take a five-year period, it will be very, very dramatic. This is the Live Era."