Microsoft.Net shrouded in mystery

By Mike Ricciuti
Staff Writer, CNET News.com
October 18, 2001, 4:00 a.m. PT

Peter Osbourne had a simple idea: He and his team of 10 programmers at Dollar Rent A Car Systems created software code that made it possible for people to rent autos through the Web sites of Southwest Airlines and other partners.

Little did he know that he had contributed to a marketing revolution that would reinvent the world's largest software company around a colossal technology campaign known as Microsoft.Net. Suddenly, the car project became a showcase for the burgeoning Web services initiative, with Osbourne as its poster child.

"Some writers ask me, 'So, what is .Net?' And I say, 'Hey, you're talking to the wrong guy,'" said the group manager of advanced technology at Dollar, still amazed at all the attention. "My interest is in looking for tools that will add value to me and make it easier for me to develop."

	The software giant's .Net Web services plan includes four key areas: 1. Web services: .Net My Services, formerly code-named HailStorm, includes the existing Passport online ID system and new services, such as calendar, profile, e-wallet, notifications and contact management, along with a service to meter use of those services, which Microsoft and partners will offer for a fee. Microsoft's goal: information available on any device, anyplace. Expected to debut next year. 2. Programming model: Called the .Net Framework, it expands the existing Win32 model to include Web services development and supports XML and SOAP. Intended to entice developers using Visual Basic and other Microsoft tools to build Web service applications on Microsoft's software. 3. Web sites: Microsoft will market Web services from itself and partners through its bCentral and MSN Web sites. 4. .Net Enterprise Servers: Largely a renaming of existing SQL Server, Exchange and other server software. Revamped versions tuned to .Net planned for release next year. —Mike Ricciuti

With the release of Windows XP--the first major public step in its .Net initiative--the software leader is in the excruciatingly delicate position of pushing to market a crucial product featuring an integration plan that is being challenged as anti-competitive in the company's landmark federal case. Some say the sheer scope of the .Net campaign will dwarf the concerns of previous legal challenges involving browsers and operating systems.

Microsoft.Net is a mammoth effort that begins with Windows XP and branches out to nearly all of Microsoft's products, services, Web sites and development efforts. It is an umbrella concept for how new software should be designed; a set of products for building that software; and an initial set of hosted services, called .Net My Services. Through that controversial strategy, Microsoft plans to offer a broad array of services, including online calendaring, contact-list management, document and image storage, credit card information, and personal identification data--all accessible from any conceivable digital device, anywhere on the planet.

"This whole thing is driven by the fact that Microsoft has hundreds of millions of Windows users out there, but Microsoft doesn't have a direct monthly billing relationship with those users," said Matt Rosoff, an analyst at Directions on Microsoft. "That's their consumer strategy, in a nutshell."

Industry analysts and Microsoft customers are quick to point out that while .Net is surrounded by a thick layer of vapor, it is far more than the usual marketing hype. The foundation of the plan--essentially software integration using Extensible Markup Language (XML), a Web standard by which data is exchanged online--is based on real technology that works and that will become common among large companies' information-technology departments and, by extension, in consumers' daily lives.

Sun fights for Java in XP Richard Green, VP of Java software development, Sun August 13, 2001

.Net includes links to Microsoft's online properties, such as MSN and bCentral, a small-business-focused Web site, and new tools and software that business customers can buy to create their own Web services. Ultimately, the plan will encompass Microsoft's all-important transition from dependence on one-time sales of software and upgrades to a more stable source of revenue based on recurring subscription fees--the central goal of .Net My Services, which is still in development and slated for introduction next year.

"The real growth potential here for Microsoft is .Net My Services. There is more risk there, but with great risk comes great reward," said Gary Hein, an analyst with Burton Group who has spent the better part of this year studying .Net. "By weaving (.Net My Services) into Windows XP and the Microsoft-held Internet properties, you are building a subscriber base. That's the first step...It's a chicken-and-egg problem. No (partners) are going to sign up for these services unless there are users, and no users are going to sign up unless there is content."

Microsoft's grand plans are matched by equally large obstacles, ranging from antitrust questions and new competition to the need for privacy, security and reliability of its services on the wide-open, public Internet. Last month, the Consumer Federation of America, Consumers Union, Media Access Project and U.S. Public Interest Research Group sent a letter to federal and state prosecutors, contending that Microsoft's strategy of embedding its Internet services into Windows XP repeats violations cited earlier by a federal appeals court.

Christopher Payne--a Microsoft vice president who three years ago defected to Web retailer Amazon.com but has come back to help run .Net marketing--played down such antitrust concerns, saying the initiative is important to the development of the Internet, as well as to his company.

".Net is clearly a huge, huge initiative for the company, along with Windows and Office. It presents a ton of opportunity to improve the way the Web operates," Payne said. "We think we have a compelling vision on how the industry can move forward."

Outside the Microsoft rank and file, however, that vision quickly becomes blurred. Customers say the confusion surrounding .Net has been rampant in its early stages.

"It is not easy to get your hands around," said Bill Evjen, a Web developer and founder of the St. Louis .Net User Group, a 500-member organization that's among the first of its kind. ".Net will be the most difficult for people to grasp because it is so big."

Another developer and longtime Microsoft customer, who requested anonymity, blamed at least part of the confusion on the company: "The problem has been that the marketing guys have got ahold of it, and they have .Net labels on everything, like the enterprise servers. They have nothing to do with .Net." Microsoft has relabeled many of its server software products, such as the SQL Server database and Exchange communications server, as ".Net Enterprise Servers."

Others say confusion has arisen because .Net encompasses so many businesses and technologies.

".Net is not as mysterious as some people think it is. It's sort of like the story of the elephant and the blind man," said Will Zachmann, an analyst with Meta Group. "It's a conglomeration of lots of things that means different things to different people."

Payne conceded that Microsoft probably contributed to the ambiguity by introducing the concept while sidestepping the more concrete aspects of product delivery to customers, analysts and the press. "The consumer obviously doesn't understand all aspects of .Net. Clearly, we have work to do," he said.

A raft of rivals old and new
One group of technology veterans has no trouble defining the strategy: Microsoft's competitors. To those as diverse as Sun Microsystems, AOL Time Warner, Oracle and IBM, the software empire is seeking to dominate the Internet just as completely as it has dominated desktop computing for two decades.

Microsoft already controls virtually all other segments of the personal computer software industry. The company owns more than 90 percent of the PC desktop operating system market, more than 90 percent of the PC business applications market, and more than 85 percent of the Web browser market, according to analyst estimates.

Now, in moving aggressively into Web services, "Microsoft is trying to redefine the playing field to make the existing players look as if they were not playing," said Simon Phipps, chief technology evangelist at Sun. "And they have done a pretty good job of it."

To drum up support for .Net, Microsoft has taken a textbook approach to spreading its gospel by starting with its most loyal constituency: software developers, such as Dollar's Osbourne. Chairman Bill Gates told CNET News.com earlier this year that building demand for new products by seeding developer interest "is the Microsoft strategy. We have bet our future on that."

Industry analysts agree that developers are key to .Net's chances of success. "If Microsoft is successful in emulating the model they have followed in the past of getting developers out there using their tools to develop these services, they are well positioned. It's a proven answer that has worked for them many, many times in the past," Hein said. He added that Microsoft has "a very strong developer network. Probably the best."

What makes at least part of Microsoft's development task easier is that some of the technologies that make up .Net have been around for years. They have been recombined with new programming methods and concepts under the .Net and Web services plans.

"This is revolutionary for Microsoft. I have watched a lot of Microsoft products come and go over the years, and this is the biggest jump in a generation," said Evjen, whose work with the St. Louis .Net User Group has spawned more than 100 such organizations worldwide.

If the more than 4 million developers using Microsoft's Visual Basic tools can easily be encouraged to build Web services, that will promote the sale of more Microsoft software, contribute to the body of Web services available for .Net My Services that consumers will pay for, and ultimately fill the company's coffers.

As in the past, Microsoft may not have the best development tools, but they are the easiest to use. Many developers prefer Java tools, which they say are more difficult to use but also more flexible.

"Microsoft has the better tools today for building simple Web services," said Randy Heffner, an analyst with Giga Information Group.

Industry veterans who have witnessed Microsoft's methods of operation over the years say the .Net strategy will follow a familiar pattern, regardless of any early confusion it may encounter.

Meta Group's Zachmann recalls how the company entered the word-processing arena from an almost laughable underdog position in the early 1980s--when Corel's WordPerfect had roughly 80 percent of the business--and then methodically introduced version after version of Microsoft Word until it eventually dominated the market.

"Microsoft comes out with the first one, and you say that's interesting, pat them on the head, and send them back to Redmond. They come out with the next one, and you say, well, that's a big improvement, but I can't say that I would ever use that one myself. But they just kept at it and each time they do it, it gets a little better," Zachmann said. "They improve it; they pay attention. I see the same thing happening here with .Net."  

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