The software giant unveiled a set of software building blocks, grouped under the code name HailStorm, for its .Net software-as-a-service strategy. Along with HailStorm, Microsoft marshaled out new versions of its Web-based Hotmail e-mail service, MSN Messenger Service, and Passport authentication service.
The Redmond, Wash.-based software company is positioning HailStorm as way of enticing developers to create XML (Extensible Markup Language)-based Web services deliverable to a variety of PC and non-PC devices such as handhelds and Web appliances.
Microsoft said HailStorm is based on the company's Passport service and permits applications and services to cooperate on consumers' behalf. HailStorm also leans heavily on instant messaging services provided by MSN Messenger and on Microsoft's Hotmail e-mail service.
Microsoft envisions HailStorm as a way for consumers and business customers to access their data--calendars, phone books, address lists--from any location and on any device. That model closely mirrors AOL's model by which members access AOL's service via a PC, handheld, or a set-top box to retrieve their personal information.
"The technologies in your life just don't work together. You've got all these apps, all these devices and services, and every one of them is a little island of information," said Charles Fitzgerald, Microsoft's director of business development in the platform in the platform strategy group.
"What HailStorm is really about is helping people put together their
Microsoft's HailStorm lets loose
Chris LeTocq, Gartner analyst
As an example of HailStorm at work, Fitzgerald cited getting a phone number from a PC to a cell phone or getting access to a calendar across different devices.
"What Microsoft is doing is linking this to their authentication service, their Passport service," Gartner analyst Chris LeTocq said. In the past, Microsoft wooed developers with tools and APIs for Windows and Office. Now the focus will be on Passport as a key authentication component around which developers can create Web-based services.
"But I'm not sure how many people are going to be comfortable with Microsoft being the driver's license issuer for the Web," LeTocq said.
Microsoft on Monday also disclosed five development partners for its .Net plan, including eBay, which announced its partnership last week. eBay and Microsoft entered into a strategic technology exchange that includes turning the eBay API (application programming interface) into a .Net service.
In a Monday research note, Merrill Lynch analyst Henry Blodget said HailStorm is important to Microsoft for two reasons:
"First, it should increase the size and loyalty of Microsoft's consumer user base, which should ultimately create opportunities for Microsoft to charge users a monthly fee," he said.
"Second, and more importantly, HailStorm should make the .Net platform more attractive to third-party developers," Blodget said. "These developers will be able to leverage both the HailStorm code and user base when building their own Web services--similar to how they leverage the Windows OS when building PC applications."
Part of Microsoft's success with Windows has been wooing developers to create applications for the operating system, thereby increasing Windows' appeal. In transitioning to a Web-based services strategy, Microsoft must continue to attract developers for the same reasons.
"Attracting developers to the .Net platform is one of Microsoft's key strategic imperatives for the next several years," Blodget said. "Doing so will help drive sales of nearly all core Microsoft products, which will be tied to .Net."
But Microsoft faces multiple challenges as it seeks to shift sales away from PC-bound software applications to Web-based software and services. One trouble spot may be battling competitors, including IBM, Sun Microsystems and Hewlett-Packard, that are also hoping to attract developers.
Show me the money
Microsoft said it plans to tap end users--consumers and business customers--as the primary source of revenue from HailStorm services. The move could market a dramatic shift in how Microsoft delivers Internet services, which for the most part, have been free. The company envisions HailStorm as helping to move the Web to an end-user subscription model in which consumers pay to use a service.
"The Internet business model needs a reboot," Fitzgerald said. "If we're going to operate a business, we need to get paid for it...but we're only going to get paid if we actually deliver value that the customers find compelling."
Gartner analysts David Smith and Chris LeTocq say HailStorm heralds the end of reliance on advertising revenue as the way to
make money over the Internet.
"There's no advertising in HailStorm, so that you don't get confused about who am I serving here, the advertiser or the end user," Fitzgerald said. While the Microsoft.Net architecture will work with ad-funded services, "HailStorm itself has a very clean, unconflicted business model," he said.
Microsoft chose this approach in part because of Internet privacy concerns. The software maker is betting it can not only provide tools that better protect privacy but return control of personal data back to individuals.
"You'll find it very easy to understand who has access to your data," Fitzgerald said.
"What Microsoft is doing is something we've been talking about for a while: personal-context services," LeTocq said. "It is in fact one of the areas we think is going to be so useful to people that if Microsoft gets it right, people would be willing to pay for it. The question is: How much?"
Gartner characterizes a personal-context service as frequently-used information stored on the Web people can access from virtually any kind of device. In some ways, AOL is taking a similar approach with its online access and instant messaging services.
Microsoft plans to broadly support HailStorm in its applications such as Office XP, Windows XP, games and other applications. The most common use in Windows XP would be the MSN messenger service. The company also said it would integrate Windows and Passport authentication as well as use HailStorm for delivering software updates.
HailStorm is based on Passport's user-authentication technology, which Microsoft uses for Hotmail, MSN Messenger, and some MSN Web services. The company describes the XML-based technology as user rather than device specific. Rather than keeping information on a single device such as a PC, Microsoft envisions people accessing content and personal information through a number of devices created using XML tools.
Microsoft is looking to launch two types of .Net services: broad horizontal building-block services such as HailStorm and application-specific services.
HailStorm initially will comprise 14 software services including MyAddress, an electronic and geographic address for an identity; MyProfile, which includes a name, nickname, special dates and pictures; MyContacts, an electronic address book; MyLocation for pinpointing locations; MyNotifications, with will pass along updates and other information; and MyInbox, which includes items such as e-mail and voicemail.
Microsoft said HailStorm will enter beta testing later this year and will be released next year.
Rather than solely relying on Microsoft technology to become the standard for these services, the company is using established Web development languages such as XML, SOAP (Simple Object Access Protocol) and UDDI ( Universal Description Discovery and Integration).
IBM also is pushing XML, the emerging choice du jour for creating Web pages, and UDDI, a sort of Web services Yellow Pages for developers. IBM last week used XML and UDDI to beef up its WebSphere Application Server and has been aggressively using the tools to woo developers to its middleware software.
Technology Business Research analyst Bob Sutherland said that while he expects competition between Microsoft and IBM will be fierce over XML, "they will woo customers not so much on the benefits of the XML platform but what their products have to offer."