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
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
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
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
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
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
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
How will moving software users to a subscription-based
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
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
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.