Microsoft today announced its new strategy for competing in the world of software as services currently being dominated by Yahoo, Google and Apple. This is a fierce set of competitors and the competition is bound to heat up in the coming months and years which will definitely benefit consumers and third-party software developers in the short- and long-term.
At the center of this strategy are two new products: Windows Live and Office Live. With the Windows and Office product lines serving as linchpins of Microsoft’s historic dominance and financial success, it is fitting those brands are the basis for this new “live era”.
In a nutshell, Windows Live is a set of Internet-based personal services, such as email, calendaring, blogging and instant messaging that is primarily supported by advertising, but separate from the operating system itself. Office Live will have both ad-based and subscription versions that augment the desktop version of the productivity suite.
Shortly after the launch I visited the Windows Live site (http://www.live.com) to try things out myself. You can click the image below to see a screenshot of my page configured with a couple RSS feed parts, a weather part and a stock quote part. It was really easy to customize my page and move things around to my liking. It is obvious the site is really “beta” quality since my parts failed to update a couple times and clicking the feedback link caused my machine to hang. :shocked:
So how will Microsoft switch to this ad-based revenue strategy without cannibalizing its paid software? The company plans to have tiered versions with the lowest tiers being free (ad-supported) to users and the higher-end being paid for by the user (presumably ad free).
While the launch event itself was awful — Ray Ozzie did an excellent job confusing everyone and Blake Irving had some serious demo issues — we should separate the message from the messengers. Overall, I believe this change in focus will benefit Microsoft and its shareholders the same way Gates’ legendary The Internet Tidal Wave memo did ten years ago next month. Moreover, it will benefit consumers and that is ultimately the core of Microsoft’s vision.