New MS architecture: server = service

In an interview with news.com Bill Gates  was asked: More developers are becoming interested in building new applications using the Web as a platform, as opposed to the PC. Do you feel you're in competition with Google, Yahoo and other Web properties for developers' attention?

His answer: 

No, I don't think so. The architecture we are interested in we call server-equals-service, so that we will have the full Exchange capability that you can subscribe to, where we run it, or you can have it on-premise with the traditional licensing approach. At this conference, we do give out APIs (application programming interfaces) for the MSN Search and the MSN Virtual Earth capability, so things that have been cloud-based services, you can have client applications that other services can connect to. So, I'd say the evolution is server to service, and bringing that symmetry in.

With Google, there are rumors about them being interested in that services piece, but they really haven't done that much. Our search API is way better than their search API. Clearly, they are working in that area. They haven't done as much on the server piece. They had a Google server, but it was very bad at corporate search. That did not work well at all. That's the only place where I think they have done any server-type piece. Yahoo doesn't think of themselves as a platform company. I don't think you will ever have the Yahoo PDC. Google, because they are in the honeymoon phase, people think that they do all things at all times in all ways.

If I read this correctly, Google is the competitor in the long run for developers and services infrastructure, Yahoo is more of a media and entertainment distribution and personalized portal company (competing with MSN). You can bet that Microsoft will start talking about server = services  (like MSN Search and associated APIs or hosted CRM) and making more of it applications available as hosted services in the future. But, it won't be easy to make the transition given how tied everything has been to the client server model and notion of rich clients.

Also: Listen to Jon Udell's interview (podcast) with Gates. He gets into the details, such as the relationship of Office 12 to Vista and .NET; how the .NET CLR and runtime will become widespread; LINQ, or language-integrated query; RSS; amd Windows Presentation Foundation/Everywhere (portable Avalon).

Update 09/14/05 9:30 PST: Phil Wainewright offers his take on the challenge before Gates and company to walk the talk about server=service...