Earlier this week, Bill Gates and other Microsoft chief officers gathered in San Francisco to announce the company’s new “live services” platform, solidifying expectations that it could be heading in a new direction to prevent Internet powerhouses such as Google Inc. and Salesforce.com from infringing on its territory.
The new offerings, Windows Live and Office Live, based on the emerging “software as service” model popularized by Google and Salesforce.com, among others, will allow consumers access to services such as e-mail and business applications online. This would allow for consumers, including small businesses, to purchase and use software online. Windows Live, for instance, will be offered for free but will have premium subscription services, as well.
With services like Google Desktop and online CRM applications available to SMEs through Salesforce.com, Microsoft no doubt read the warnings that its licensing cash cow was facing a serious threat. And with rumors that Google’s ultimate end game is to offer an online operating system, which would obviously pose a threat to Microsoft’s licensed operating system, the time to act couldn’t be more apparent.
Not to mention the consumer need that is obviously present; with more and more people getting online and looking for ways to integrate their online and offline ventures and downloading many of the numerous programs available for them to do so onto a desktop run by a Microsoft operating system, the company got wise to the notion that they could cash in while at the same time maintaining their consumer popularity. Though Microsoft has said it has no plans to do away with its licensed operating systems, it’s probable that live services will play a large role in the company’s future.
There is one possible drawback to this new era of the “software as service” model: the loss of consumer fidelity. As consumers become accustomed to going online downloading new applications without restriction, the possibility that their awareness of and loyalty to certain brands could wane should be considered. But for a company of Microsoft’s caliber, it’s safe to assume that the venture into live services can only mean brighter days.