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Monday, April 30, 2007 - Page updated at 12:30 PM

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Microsoft to tout plan on Web challenge

Seattle Times technology reporter

Last week, Microsoft released gilded third-quarter results largely on the strength of Windows Vista and Office 2007. The report served to quiet some grumbling about the new operating system's performance and acceptance, and it seemed to assure investors that the cash cows are safely in the pasture.

Today through Wednesday, Microsoft is hosting Mix07, a major conference in Las Vegas to talk about another major source of grumbling: its strategy for competing in the next generation of software.

"It's the biggest challenge for Microsoft right now," said Brent Thill, an analyst at Citigroup who recently published a research report on the industry's transition. "I still have yet to see that they really have capitalized on this."

The sold-out Mix, in its second year, is billed as a chance for Web developers and designers, marketers and business decision-makers to learn about Microsoft's technologies for Web 2.0 — software as a service or, in the company's nomenclature, software plus services.

Sessions with titles such as "Windows Presentation Foundation and the Next Generation of Online Comic Book Reading" will surely appeal to a broad techie audience.

More than that, Mix — headlined by top execs Ray Ozzie and Robbie Bach — is a venue for the company to shed light on its progress and strategy.

"Especially now that Vista has shipped, this really seems to be their focus," said Ryan Stewart, a Seattle developer, consultant and blogger for ZDNet.com.

Software and the Internet


Who's talking and listening at the Mix07 conference for Web developers in Las Vegas.

Ray Ozzie: Microsoft's chief software architect and the man responsible for the company's software-plus-services effort headlines the event. His keynote presentation is this morning.

Robbie Bach: President of the Entertainment and Devices Division is scheduled to speak Tuesday afternoon.

The audience: Web designers, developers, business leaders and marketers. Microsoft would not disclose attendance at the sold-out event other than to say it's up 16 percent from last year and will be less than 5,000. The capacity of the main ballroom where the keynote presentations will be held is between 3,500 and 4,000.

Other companies: Microsoft is sharing the event with some of its would-be competitors and customers across several industries, including Yahoo!, MySpace, ABC, Coca-Cola and Amazon.com.

The technology industry is well into a transformation from software that runs just on the desktop, or just on the Internet, to programs that derive benefits from both: the processing power of desktop computing combined with access to information over the Internet.

Business models are still emerging and differ from corporate to consumer applications. Prominent examples include software services paid for through advertising revenue or subscriptions.

New technologies

At Mix, Microsoft will tout new technologies and products for software plus services. These include its new Web browser, Internet Explorer 7; a staggering array of consumer Web applications under the "Live" brand umbrella; tools for creating digital media and services applications; and Silverlight, the new platform for delivering video content the company announced two weeks ago.

Formidable competitors are arrayed across all of these businesses, and Microsoft is coming from behind.

Salesforce.com, with its hosted customer-relationship management software, is a leader in bringing this technology to businesses, which are adopting it in growing numbers. Google has a suite of Internet applications centered on its cash-dispensing search engine. Adobe is going head-to-head with Microsoft on several technologies for developing and delivering this new breed of applications.

"Between Google on the Web and Adobe in this whole design space, Microsoft has really dropped the ball in a lot of ways," said Stewart, the ZDNet blogger. "I think this is their attempt at coming back."

Strengths to game

Microsoft brings several strengths to the game: dominance of the desktop with Windows; legions of developers using existing platforms; the Xbox gaming platform and network; the industry's largest stable of partner companies, many eager to forge ahead in software services; a huge pile of cash; and executives willing to spend it long term.

Thill and others are expecting Microsoft to explain how developers can use these new technologies, point to customers using them, and clarify the company's broad plan for services — something sorely lacking even inside the company.

Chris Overd, a London-based contributor to LiveSide.net, an independent Web site devoted to tracking Microsoft's myriad services applications, said lots of visitors to the site are Microsoft employees.

"We do bear in mind that some of those guys are learning from us," he said.

Industry icon

The man on stage today is Ozzie, a software-industry icon who joined Microsoft in March 2005 when it acquired his company, Groove Networks. Ozzie is the executive in charge of Microsoft's companywide software-plus-services efforts and the heir-apparent to Bill Gates on big-picture thinking about software.

The pressure is on.

An InformationWeek cover story this month put it bluntly in a headline next to a full-page photo of silver-haired, bespectacled Ozzie: "Put up or shut up."

Ozzie publicly took the helm of Microsoft's services effort in October 2005 with his 5,000-word "Internet Services Disruption" memo to top executives. He knew then how critical it is for Microsoft to respond to the changes in the industry.

"As much as ever, it's clear that if we fail to do so, our business as we know it is at risk," Ozzie wrote. "We must respond quickly and decisively."

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com

Copyright © 2007 The Seattle Times Company

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