Windows Live and Office Live

Microsoft is venturing out of its "shrink wrapped" business model into an online/on-demand service such as Google and other competitors have positioned themselves in. Gates is billing it as "a revolution in how we think about software". Windows Live and Office Live will be an evolution of Microsoft's traditional system of distribution for its market leading products, following a "service + software" strategy. Google and Yahoo's services have grown in complexity and functionality over the last year, offering calendars, planners, journals, voice services, etc. as well as standard email and messaging. Sun Microsystems has recently partnered with Google to provide a service based version of OpenOffice, an increasingly popular and cost effective alternative to MS Office. As with the .NET Framework, Microsoft boldly plots a strategy that sidesteps their cash cow, Windows, through browser based hosted software. They envision the current $15bn market of service based software to grow to $150bn in ten years. An online/on-demand model has become a practical alternative to "shrink wrapped" distribution through wider adoption of high bandwidth connectivity and the dependence of desktop applications on continual patches and updates from the web. Microsoft will generate revenue through three options: free services with advertising, standard subscription, and fully-featured premium subscription for power users. This more than likely represents a "testing the water" first step for MS: Windows Live will debut as, essentially, a re-packaging of Messenger, Hotmail, antivirus functionality, browser functionality, and other features; and Office Live will debut offering entrepreneurs there own domain, website, and email services, as well as the online project and document management tools. However, it is a fairly dramatic recognition that the success of Google's business model (and the portal model in general) represents a threat to the foundation of the traditional shrink wrap model. And the contexual advertising opportunities are enviable. Is is not difficult to envision a tax filing firm's advertisement contexually placed with an Excel service being used to calculate a user's income taxes. (Is this the first stage of Windows becoming more of a portal than an OS?) Here is a screen shot of how the new "Live" offerings fit into the MS line. What does this mean to us? LevelTen is uniqueley positioned to capitalize on the tectonic shifts the sofware industry will be experiencing in the coming years. As desktop functionality makes its way to a revolutionary new form of distribution, they will require a revolutionary form of marketing and PR. Will bloated, bureaucratic "full service" ad firms be agile and adaptive enough to meet the challange? Are they adaptive enough to meet today's challenges? Large companies, even the Microsofts, will need fresh ideas from lean, up-and-coming organizations keenly attuned to the vicissitudes of the web marketplace. http://news.bbc.co.uk/1/hi/business/4399018.stm http://msnbc.msn.com/id/9897607/ http://blogs.pcworld.com/techlog/archives/001050.html