Secret project may be Microsoft's next big deal

Microsoft?s new stealth service, known as Netdocs, is slated to be one of its showcase .Net building blocks, but company officials steadfastly refuse to discuss it publicly.

.Net is Microsoft's shorthand for its corporate strategy to deliver software as a service. According to its .Net road map, applications and pieces of applications soon will be delivered as "services" that can be rented over the Internet.

Microsoft officials would not comment on when Netdocs will debut. The service is not yet thought to be in alpha or beta testing, however.

According to sources, Netdocs is a single, integrated application that will include a full suite of functions, including email, personal information management, document-authoring tools, digital-media management, and instant messaging. Microsoft will make Netdocs available only as a hosted service over the Internet, not as a shrink-wrapped application or software that's preloaded on the PC.

Netdocs will feature a new user interface that looks nothing like the company?s Internet Explorer Web browser or Windows Explorer. Instead, Netdocs is expected to offer a workspace based on Extensible Markup Language (XML), where all applications are available simultaneously. This interface is based on .Net technology that Microsoft, in the past, has referred as the "Universal Canvas."

Some people inside Microsoft describe Netdocs as a ".Net application/service for knowledge workers." Others call it a next-generation productivity suite being designed for individuals to share personal information and collaborate.

Whether Netdocs is targeted for individuals, small businesses, or corporate customers, the technology could change the way Microsoft customers handle many tasks--ranging from signing up for their online services, to building configurable home pages, to managing their own .Net billing, support, and administrative services.

"If you think of what a hosted version of Microsoft Office would look like, if it worked properly, you'd have Netdocs," said one source who was familiar with Microsoft's plans.

Netdocs is a product of Microsoft?s competitive team culture. Different teams are encouraged to work on competing software projects within the company; the project favored by Microsoft's top brass ultimately is christened the winner.

The battle between the Netdocs and Office teams has been one of the fiercer ones, according to sources close to the company. The challenge has pitted Microsoft senior vice president of Office Steven Sinofsky and his troops against senior vice president of subscription services Brian MacDonald and his forces.

In many ways, the Netdocs-Office face-off epitomizes the challenges Microsoft, as a company, is facing as it attempts to move from offering packaged PC software to delivering software services over the Web. While some within the company continue to bank on the future of shrink-wrapped applications, others believe hosted applications that are "rented" via a subscription model are poised gain acceptance soon.