Growing Pains, Progress For .Net

While Gates was optimistic about .Net and Microsoft's overall software-as-a-service initiative, he gave his company mixed reviews. "In some respects, we're further ahead than we expected. In some respects, we haven't made as much progress as we expected," Gates said during a .Net briefing earlier this summer.

Both Gates and Microsoft CEO Steve Ballmer said the software giant must do a better job of communicating the value of Web services and explaining exactly what .Net entails. Many vendors, including Microsoft, have struggled with turning the concept of software-as-a-service into a reality. Gates said Microsoft has made "very modest progress" in that area.

.Net also got a lukewarm reception from analysts. A recent Aberdeen Group report stated the technology has significant potential, but Microsoft still hasn't communicated .Net's value.

Microsoft has also struggled with building .Net momentum in its channel. Major ISVs, such as BEA Systems and Oracle, have leaned more toward Java, .Net's main competition, while many solution providers have criticized Microsoft's channel conflict, new licensing models and lack of partner support during the past year. There are also technical challenges for Microsoft. Rewriting customer applications in the .Net framework will take a lot of time, money and software developers.

Softricity, a Boston-based software-maker, recently forged a multiyear strategic alliance with Microsoft involving joint development, sales and marketing initiatives to turn Windows applications into .Net-managed Web services via Softricity's SoftGrid platform. CEO Harry Ruda says Microsoft has already brought Softricity a few customers looking to switch to .Net, but expects it will take a couple of years before .Net becomes a dominant force. ".Net is going to get there, but the question is, when?" Ruda asks. "There's a lot of complex enterprise applications out there, and it will be very expensive and time-consuming to rewrite them in .Net."

Nevertheless, .Net has become a prevalent entity lately, after a year when most marketing power was devoted to Windows XP and new gaming system Xbox. Microsoft made .Net a major focus at its Fusion 2002 partner conference this summer and has set up several .Net workshops in an effort to jump-start its channel involvement. The software giant also plans to boost R and D funding, a decision .Net will benefit from. In addition, .Net training manuals are now in major bookstores.

Gates gave his company high marks for promoting XML and Web-services standards. In February, Microsoft joined forces with IBM, which he sees as his biggest Web-services competitor, to create the Web Services Interoperability Organization. With more than 100 members today, such as AT&T, Cisco and Oracle, the group promotes Web-services interoperability across different vendor platforms, apps and programming languages.

Windows .Net Server, originally slated for release in the first half of 2002, should help boost interest in .Net, as well. Microsoft has not set a release date, but did say beta testing has been completed. Branded products such as Visual Studio .Net and the .Net Framework, launched earlier this year, have already given Microsoft an early advantage. Whenever Web services become mainstream, Microsoft is sure to be a player.