Microsoft Unveils Web Strategy

01 August 2005

Chief executive Steve Ballmer, no stranger he to portentous pronouncements, last week handed down from the summit of Mount Microsoft a tablet engraved with auguries as to The Destined Way of the Internet.

According to Ballmer's crystal ball, areas of development are likely to involve communications, web-based storage and tools to help workers collaborate better.

This would extend beyond "delivering bits [of data] to delivering bits and services," he told the company's annual analyst briefing, adding in suitably vague Delphic-fashion: "The internet's transformative impact on the software business has just begun."

Analyst Rick Sherlund from Goldman Sachs, believes the new emphasis on services could point to changes in Microsoft's core business model, implying that the Redmond, Washington monolith has digested lessons from swifter-footed rivals such as Google, Apple and eBay.

"It seems as though Microsoft is about to go on the offensive, using its large base of software products to spin off new ideas for businesses based on delivering services over the internet," Sherlund opined.

Meanwhile, from Planet Geek, a hologram of Microsoft chairman Bill Gates was beamed down to mingle with the humanoids. Microsoft, he admitted, had been a late starter internet-wise and was "playing catch-up on search".

But he predicted Microsoft's current knowhow will lead within three years to developments that far transcend the current state of technology.

Analysts' consensus, however, was that the software giant's presentations were as long on rhetoric as they were short on fact. As Rob Helm, an analyst at independent research firm Directions on Microsoft, put it: "The devil will be in the detail."

Data sourced from Financial Times Online; additional content by WARC staff