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Windows Live Surprise—Microsoft’s Disparate Strategies Come Together
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Posted On November 20, 2008
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On the heels of the typically well-orchestrated announcement of Microsoft Corp.’s commitment to cloud computing and its new Windows Azure platform (see my Nov. 6 NewsBreak, http://newsbreaks.infotoday.com/nbReader.asp?ArticleId=51455), Microsoft issued a rare surprise release regarding its Windows Live.com web services (www.windowslive.com). Many of us were never quite sure what Microsoft’s "Live" brand meant, but this announcement makes it pretty clear what the company wants it to become—a social networking platform that will leverage Microsoft’s strengths to its advantage. What are those strengths? While many see Microsoft as a dinosaur in a Web 2.0 and search-driven world, it is easy to forget that the company has 460 million customers worldwide across its desktop and online products.

According to Microsoft, Windows Live seeks to become a destination site (at http://home.live.com) that integrates email, instant messaging, photos, and online storage with social networking features. "Think of Windows Live as the single place where people using our e-mail, messaging, and photo-sharing services can stay connected," says Chris Jones, corporate vice president of Windows Live Experience Program Management at Microsoft. "Our customers have friends across the web. They communicate through many unconnected web services and want access to it all from a single location—without worrying about how it’s done. Now Windows Live takes care of that with an integrated personal communication service that works across the web with optimized experiences on the PC and mobile phone."

"Unconnected web services" is Microsoft-speak for other popular applications on the internet not powered by Microsoft. Initial partners include Flickr, LinkedIn, Pandora, Photobucket, Twitter, WordPress, and Yelp, Inc. Users can set up their profiles to include these services, and the information will get delivered via a Facebook-like "What’s New" feed.

The What’s New feed is displayed on the Live.com website, Hotmail, and interestingly, in Windows Live Messenger. Instant messaging (IM) is an area where Microsoft dominates against its Yahoo! Messenger and Google’s Gtalk rivals. While Yahoo! and Google are slowly adding social components to their email programs, Microsoft is expanding the functionality of its instant messaging client. Covering all popular applications for users’ behaviors is a smart move. When you email or IM your friend within the new Live.com service, you will see a concise update of the friend’s online activity, on both Windows Live and Microsoft’s third-party services.

Other notable features include Windows Live SkyDrive, an online storage system that will increase storage up to 25GB and Windows Live Groups, a place for people to collaborate online, including sharing calendars, storage, email addresses, and instant messaging.

Software Plus Services

In case you thought that Microsoft was fully embracing a 100% web services strategy, the new Windows Live comes with a downloadable product called Essentials, a free set of "feature-rich" services (Microsoft can’t bring themselves to admit that web applications are feature-rich) that allow users to leverage Windows Live on their desktops. The tools include integration with the third-party social networking services on Live.com. The lure of desktop integration is still a powerful carrot for Microsoft to wield with online-only competitors. This announcement, coupled with the recent announcement of Office Online, shows that Microsoft is committed to offering its popular services both online and on the desktop.

Integrating the online Office products with the Live.com service is an obvious future advancement for Live.com. A few weeks ago, before these announcements were made, it was hard to determine where Microsoft was headed with disparate services and online strategies.

Now that the strategy of adding social components to Microsoft’s online products seems set, Microsoft detractors will say that they are not fully committed to embracing a 100% web world. Microsoft competitors should beware that Microsoft is committed to both cloud computing and social networking. Microsoft’s bet is that the desktop still holds enough value to keep all pure web plays at arms length. As long as Microsoft keeps selling millions of versions of Windows and Office, it will have the money to see if its vision of the future is correct.

Surprise!

The main loser in this announcement may be the venerable Facebook, which famously accepted a $240 million investment from Microsoft in 2006. According to the well-connected Michael Arrington from TechCrunch, "From people we’ve talked to, the launch came as a complete surprise to everyone, including Facebook," (www.techcrunch.com/2008/11/14/the-very-curious-microsoft-facebook-user-data-relationship). It is surprising to see that Facebook is not a launch partner with the other social networking services.

For industry veterans who have been through a few technology cycles, the past is littered with companies that no longer exist that Microsoft had worked with. Many stories, right or wrong, tell of Microsoft building similar functionality into its software products after working together. While Microsoft has yet to show it has the ability to do this in the web world, it appears it is still the same aggressive company.

If the announcement was a surprise to Facebook, it appears Microsoft may have been keeping a close eye on its investment, and it integrated some of the more popular features into the new Live.com. While Facebook’s strategy to become a platform opened a lot of eyes when tens of thousands of developers created applications, it may have awoken the sleeping giant to "socialize" its offerings.

Microsoft now has more integrated social features than Yahoo! and Google. Whether or not this changes the trajectory of Microsoft’s web offerings remains to be seen, but should Microsoft maintain its leadership after this latest technology cycle, it may not be considered a surprise.


Erik Arnold is a consultant for Adhere Solutions, Inc., a company that specializes in helping organizations leverage new technologies to maximize efficiency and revenue.

Email Erik Arnold
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