Microsoft eyes services for business

By Mike Ricciuti
Staff Writer, CNET News.com

Published: December 8, 2005, 4:00 AM PST

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Microsoft may be rushing headlong into online services targeted to consumers. But for its all-important business customers, the software giant has been taking a more measured approach.

The company has already mapped out two online services to augment its Windows and Office desktop software franchises. Now executives are beginning to provide a few details of what online services Microsoft has in store to complement its server software.

New server-oriented online services are in the works, said Bob Muglia, Microsoft's senior vice president in charge of servers and tools. He said Microsoft is "going to be doing anti-malware services. That's an example of something that would augment Windows Server," Muglia said. Another possible service is spam filtering for messaging, he added.

News.context

What's new:
Microsoft is carefully weighing what additional online services it might offer its business customers.

Bottom line:
In addition to its already planned online services for Windows and Office desktop products, the company is developing server-oriented online services, although it has not yet disclosed how those products will be packaged and delivered.

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However, exactly how those business services will be packaged and delivered is still up for debate, Muglia told CNET News.com on Tuesday. "What we're looking at are ways in which we can augment the products that we ship with services. We're in the business space, so what are the services that will appropriately augment the products that we have in the market? You can imagine that there are many, many different areas where we can add services on top of these existing workloads."

Muglia said additional details will emerge over the coming months. "What you will probably hear is how we are going to drive forward on specific sets of services for business customers. You can expect to hear that certainly in 2006. But don't anticipate any big thing like 'Business Live' or any such thing like that. I don't think we're going to do that," he said.

Microsoft's accelerated activity around online services stems from October's internal memo that Chairman Bill Gates wrote to Microsoft employees, warning that online services from Google and other competitors "will be very disruptive" and could threaten the software giant's business in the coming years. In tone, the memo--a condensed version of a more detailed call to action authored by Chief Technical Officer Ray Ozzie--echoed the Internet Tidal Wave memo that Gates issued a decade earlier.

The company's bet on software services reflects the growing interest in Web-delivered services and the need to find new sales channels for its products. On the desktop, the company is facing a slowing pace of contract renewals and upgrades for its software, analysts said.

"It's not just consumers. A lot of it...is focused on businesses. We're giving them a choice of how they do IT, and some of it is through services."

--Bill Gates, chairman, Microsoft

In September, Microsoft announced it was reorganizing itself into three units and tapping Ozzie to lead a companywide push for services. Last month, Microsoft announced the first fruits of that effort--products called Windows Live and Office Live. Windows Live combines many of Microsoft's existing MSN services into an advertising-supported product for consumers, while Office Live is a set of services, some free and some paid, aimed for small businesses.

Many hints, few details
As for where Microsoft may be headed with services for large businesses, company executives have dropped additional hints over the past few months. Gates, in an interview with CNET News.com earlier this year, said business will play a key role in any services plan. "It's not just consumers. A lot of it, actually the majority of this, is focused on businesses. We're giving them a choice of how they do IT, and some of it is through services," he said.