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Can the wizard of Oz pull it off?

Ray Ozzie will face the challenge of a lifetime turning Microsoft's new services mantra into a success, CNET's Charles Cooper says.

Until the mid-1990s, Lotus was one of the software companies that really mattered. But management failed to get behind Windows and allowed Microsoft to move in for the kill.

Price competition turned cut-throat, and sales of Lotus's word processing, database and spreadsheet applications predictably swooned. But Lotus Notes was a different story. Corporate customers couldn't get enough of this revolutionary groupware product. The future looked so bright that Notes was on the cusp of turning into the "killer app" of the pre-Internet era.

Had current events not intruded, maybe Lotus' fate would have been different. But in June 1995, IBM launched a hostile takeover bid. Lotus resisted and the two sides hunkered down for a fight. Big Blue's CEO, Lou Gerstner, stood ready to sweeten the offer, but he first had to win over Ray Ozzie, the technologist behind Notes. If Ozzie walked, IBM would be buying nothing more than a struggling apps vendor.

With so many entrenched interests in a company that numbers some 61,000 people, Ozzie has a big job ahead.

Gerstner so coveted Ozzie that he even paid a personal visit to Ozzie's headquarters in the Boston suburbs. Whatever was said, it smoothed the way for the subsequent $3.5 billion deal. Ozzie got what he wanted for his team and stayed around for the transition.

So it was that the public got its introduction to this reclusive engineer with the prematurely white shock of hair. For the coding cognoscenti, Ozzie was a familiar face. He rated as geek royalty among developers, and his fan base happened to include the guy who ran Microsoft at the time.

When Ozzie later left IBM to launch Groove Networks, a company that developed collaboration applications for "virtual offices" over the Internet, Microsoft put Groove on its radar. First came a $51 million investment in 2001. Then, earlier this year, Microsoft finally bought the entire company outright, and Ozzie became part of a triumvirate of chief technical officers.

Judging by the responsibility Ozzie has for spearheading Microsoft's new product direction, he clearly is the one who has Bill Gates' ear. But can he reprise the role of corporate savior that he filled during his Lotus days? By any measuring stick, this promises to be the trickiest transition Microsoft has had to navigate since it got religion about the Internet 10 years ago.

Turning the ship 180 degrees
This Microsoft shift is more than simply Google envy. The company needs to find a way to extend its products in new and interesting ways that let it make the most use of Web services.

Ozzie certainly has the vision, but does Microsoft have the corporate will? With so many entrenched interests in a company that numbers some 61,000 people, Ozzie has a big job ahead.

He talks about the insatiable demand for a seamless user experience among consumers--and he's right. Much of Google'svalue proposition, for example, is about bringing people together across firewalls. The product just works.

Sitting in the audience and watching the sundry product demos at Microsoft's Windows Live launch Tuesday morning, it was hard to tell whether Microsoft really delivered on that promise. Nothing we saw was immediately available, and it's hard to predict based upon beta products (though I hasten to add that hasn't held back Google). I certainly liked the coming attractions as evidenced by the demos of Windows Live and Office Live.

In the near term, I think Microsoft may have a problem explaining what it's got. This was a bloviation-fest with too much theory. Essentially, Microsoft bundled together bits and pieces of existing personal services, like e-mail and instant messaging, and put them into a spiffy new container that it hopes will attract advertising. OK so far, but now Microsoft's got to convince customers these are must-haves. Before that, you have to explain what you're selling.

The last thing Microsoft needs is the kind of confusion that clouded the future of .Net My Services. Ozzie wasn't around for that chapter, but I'm sure Gates can fill him in.