Microsoft's Jekyll-and-Live identity crisis

In its struggle to adapt to the emergence of on-demand applications and online services, Microsoft is turning before our eyes into two separate companies — one fresh, dynamic and assertive, the other crusty, faltering and defensive. Microsoft constantly seems to switch from one identity to its opposite and then the next day it switches back again. I'm forcefully reminded of the classic Robert Louis Stevenson tale of The Strange Case of Dr Jekyll and Mr Hyde (picture below courtesy of Wikimedia Commons). In the strange case of Microsoft, it's equally impossible to predict which identity will finally prevail.

On the one hand, there's Microsoft Live, an entirely new identity for the software vendor, which first emerged in November 2005. Today, the independent website LiveSide reports on the activities of a team reporting directly to chief software architect Ray Ozzie that is said to be developing Windows Live Core - the Software as a Service platform:

"... the Windows Live Core team ... has 'joined Ray Ozzie to focus on next generation cloud services; to build an highly efficient computing fabric for Microsoft data centers and a services platform for agile development of high-quality cloud services."

This is exactly the kind of thing Microsoft has to do to compete with Google and its other big rivals in the on-demand environment. It has to be intimately familiar with the operational and architectural demands of high-volume, best-in-class services infrastructures — something it can only do by building and operating such an infrastructure itself (update added 2:50pm: Mary Jo Foley has put together a rundown of the Live Core team and their credentials, which are impressive).

Examples like this give fleeting glimpses of what Live can and should become, and yet so many Live initiatives frequently stumble as if Microsoft simply cannot shake off its old self. In January, I highlighted Office Live's abysmal treatment of its beta adopters. Then last month an unnoticed bug on Microsoft's newly launched AdCenter cost-per-click advertising service began overcharging advertisers by thousands of dollars. The bug was quickly fixed and customers refunded (sometimes by too much, though), but it's a useful reminder of how software errors become so much more calamitous when you're delivering services on-demand — and of just how impressive by comparison Google's almost flawless execution of its AdWords and AdCenter services has been over the years.

Microsoft's darker identity is on display most frighteningly in its traditional application server business, where the vendor persists in the horridly mistaken belief that it can somehow graft on-demand services characteristics onto its existing on-premises server products.

Last week, the company released updated versions of its offerings for hosting providers, which allow them to offer hosted Exchange Server and SharePoint Services, among other capabilities. These complex, cumbersome and frankly scary server products are the result of many years of tinkering with the underlying server code to render it usable in a shared hosting context. A few brave hosting companies have managed to tame them for their own profit, but they are concerned at the prospect of Microsoft potentially offering its own hosted services based on the same code, as ZDNet blogger Mary Jo Foley speculated last week: Are Exchange Live and SharePoint Live just around the corner?. These looming figures may cast an ominous shadow, but at least if Microsoft finally does get to eat its own dogfood it will start to realize how much of a personality change these products still need before they can really function as competitive online services platforms.