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VNU Net: Ballmer outlines Microsoft's .Net vision

Jun 27, 2000, 18:22 (11 Talkback[s])
(Other stories by John Geralds)

By John Geralds, VNU Net

Microsoft can be a patient company. It took more than seven years for people to take its Windows desktop operating system seriously from the launch of version 1.0 to the release of version 3.0.

And last Thursday, the Redmond giant previewed its planned transition from a Windows-centric world to what it used to describe as Next Generation Windows Services and now calls .Net - a platform that will both provide subscription-based software services to users over the internet and deliver a programming infrastructure to developers.

Steve Ballmer, Microsoft's chief executive, stressed that the transition will take time. But he also realised that the press and analysts gathered at the company's Redmond headquarters for the launch were having trouble with the .Net concept, despite several hours of presentations and demos.

As a result, he asked himself the rhetorical question, what is .Net?, and tried to explain the concept and vision to vnunet.com's John Geralds.

What is .Net?
.Net represents a set, an environment, a programming infrastructure that supports the next generation of the internet as a platform. It is an enabling environment for that. .Net is also a user environment, a set of fundamental user services that live on the client, in the server, in the cloud, that are consistent with and build off that programming model. So, it's both a user experience and a set of developer experiences. That's the conceptual description of what is .Net.

It's a set of software that runs on PC clients, that can run and will run in devices, CDs, wireless devices etc, that will run in servers, that run behind firewalls, or that run out on the public internet. .Net is a set of services - like identity, storage, messaging and notification - that Microsoft will operate and that third-party developers and users can all share in.

Why do you think Microsoft can once again unify the market, as it did with Windows, behind this latest .Net platform?
Number one: most companies that offer services such as we are talking about have not embraced XML.

Number two: they have not embraced software developers. They provide these things as monolithic services that you either use or don't use. Not as general infrastructure which you can plug into.

Number three: I think you need to have a critical mass of services to get any one service off the ground. There is a critical mass of capability that you need to have to really get things moving and going. That's the unique role we play. I think we are ahead of most people. Yes, there are aspects that you can find in different places. But I don't think you can find any platform that is well synthesised for the variety of trends that we identify for this next generation internet.

Would you say you were betting the company on .Net?
Yes. There's a Windows.Net. There's an Office.Net. You have to look at the totality of what we are saying. But with this technical direction - the .Net platform - yes, we are betting the company.

If you change to the subscription model, will it change the profitability of Microsoft?
I think in the long run it will be good for our total profit dollars. I don't expect it to decrease the profitability of the group. I don't forecast that, but I think we're going to have a lot to learn along the way. I'm not going to make any specific financial projections though.

When do you think the switch to subscription revenues will surpass licensing revenues?
Not in the next three years. We have some excited technical guys who will say: 'We can make it happen two years from now.' But I think the prudent financial planner would say not for a few years now.

How will moving software users to a subscription-based actually work?
There are a lot of ways for us to have a subscription model. One is to charge the user directly ourselves. Another is to work in conjunction with operators who will charge users and will share part of the subscription back to us. I don't think anyone is going to dominate communications to the user. I'm not saying there isn't a role for companies such as wireless operators. We want to participate with them on these value-added services. They make more money and we make more money.

Will the subscription method help to reduce the piracy rate?
It certainly helps with that. It's the by-product though. You can't say the goal is anti-piracy so we'd better change everything to a subscription model. The goal is to provide a better service to the consumer - where they are more current, where they are more up to date, where they get a broader set of things taken care of for them. It turns out when you do that you also mitigate the piracy issues that exist in the marketplace today.

Will you be faithful to XML or will you put in add-ons so that it only works on Windows devices?
No. Our competitors would say that, but it's not true. With the .Net infrastructure we want to make it easy for users and developers to play in the XML world. But if another platform has its own infrastructure that knows how to lets users see XML, it knows how to let developers author XML, that's fine. We may even invest in .Net for some other platforms, but our focus starts with Windows and some other devices. For example, we'd love to have a .Net runtime for Palm computers.

Who would you say are your strongest competitors now and who will they be in the .Net world?
In the server business it is certainly Sun and Oracle. In the MSN business, it is clearly AOL, maybe it's a Yahoo. In the PC business, it's number one. It's also Linux. In the .Net platform, I'm not sure who it will be. My suspicion is it's most likely to be Oracle or IBM. It's hard to know.

Does the .Net platform signal the beginning of the end for the PC and will it move Windows into the background?
The thing that is important about .Net is that it brings together the best of the PC and the best of the browser. Today, those are like two different application interface models. There's a standard for the way Windows applications look and there's a different standard for the way web applications look. .Net is really about bringing those together.

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