Steve Gillmor has a great post up on TechCrunch that identifies why Google should be really worried about Microsoft's Live Mesh. Most commentators have focused on the file synchronization capabilities but Steve puts his finger on why Mesh is so much more than that:
Looking at Mesh as a data synchronization transport ignores its abilities to virtualize identity, permissions, information aggregation, realtime feedback loops, and other SocMedBS attributes that define the substructure of, for example, a Twitter-Mesh-Silverlight gateway to compete with GTalk/Twitter etc.
Imagine (not for long will it be ephemeral) an information bus that orchestrates the signaling of text, rich media, calendar, communications, transaction, and group location status under a social graph umbrella based in part on user-controlled behavior aggregation (gestures). Now imagine what Google needs to do to match this architecture and its overwhelming lead in connectors to existing hardware via Windows.
Other commentators have dismissed Mesh as simply a mechanism to protect Microsoft's desktop-bound assets, but Steve turns that around and points out that what Mesh is really about is connecting the desktop into the cloud (Meshing the desktop into the cloud, as I wrote last Thursday).
Call it self-serving if you like, but Microsoft needs a bridge that will carry its existing market presence over into the cloud and Mesh is that bridge. You could equally call it customer-friendly: Microsoft users will likely be pleased to have a mechanism that helps them make that transition without orphaning their desktop and on-premise IT assets.