Live Software

I'm at a Microsoft press event in San Francisco to introduce the concept of "Live Software." The big takeaway: Microsoft is fully engaged with thinking about what I've called "Web 2.0." They are focused on the internet as the platform, on software as a service, on creating rich experiences across multiple devices, on live update as a metaphor for both software and documents, on grassroots adoption as a result of user conversations. They are also very clearly focused on advertising as a new business model. We're hearing all the Web 2.0 buzzwords: RSS, AJAX, social networking.
 

My favorite line, from Ray Ozzie: "Some say that the internet itself is the platform, and in many ways that's true. The internet has always been described as a network of networks, and it's now becoming a platform of platforms, as every web site is potentially a platform." During the Q&A, I asked specifically if this meant that data and services could be syndicated out as well as in (that is, that Microsoft software wouldn't just be consuming services from other web providers, and allowing users to syndicate them into their experience, but also that developers on other web platforms could as easily integrate data from Microsoft applications and services into their user experience.) Bill Gates replied with puzzlement, "Of course. There's no difference between syndicating out and syndicating in. It's just XML." I hope he's right, and this means that we'll see lots more data availability out of Microsoft systems and services.

Overall, I was really heartened by the presentation. Competition is good for the industry, and good for users. As they did in 1995 with the first coming of the Internet, Microsoft clearly now gets that the starting line has been reset, and everything is up for grabs. I'm looking forward to the next couple of years, as competition does indeed make what we experience today a pale shadow of what will soon be possible.

Another key takeaway for me from this presentation was that Microsoft realizes the power of being able to build an integrated experience across a hardware device, a software application, and an internet service. Ray Ozzie cited iTunes as an example (as have I), and pointed out the similarities to the Xbox360. Microsoft has more than a decade of experience with hardware devices, and has been involved in everything from game consoles to phones, PDAs, automobiles, and more. This may turn out to be a trump card that gives Microsoft an advantage against players like Google and Yahoo! (This is another reason why Macromedia (now Adobe) is going to be an important web 2.0 player, as Flash is one of the best cross platform alternatives for rich web experiences on devices. Disclaimer: I am on the board of Macromedia.)

The remainder of this entry attempts to give a running transcript of the event.

In his introduction, Bill Gates describes ideas that have a lot in common with what I've been calling Web 2.0. He makes a good point, that many Microsoft products have subtly but consistently been building in various forms of deep online access, from the long familiar software update, to online template libraries integrated into Office (a service used by 55 million unique users a month), to instrumentation of various features to report on how heavily they are used. Meanwhile, products like Sharepoint and LiveMeeting explicitly address online collaboration.

We segue to a demo of Xbox 360 Live by "executive producer" Jeff Henshaw, with attention paid to integration of messaging to recruit other users for head-to-head play, as well as now familiar community features such as user ratings, feedback, and user-contributed content. This is of course only part of the story. We see a lovely demo of HD realism in games, with a great demo of how game developers can focus on such things as crowd reaction to real time game play. But that's not all. We see the Xbox 360 as a home music platform, a photo sharing platform. Available November 26. Pretty darn appealing.

Bill articulates five "Live" Principles, remarkably similar to some of the points I've talked about as Web 2.0: His list:

• Software plus service
• Server = Service
• Support multiples pcs and devices
• Multiple styles of client
• Combination of client software, peer-to-peer, and internet services

This isn't quite software as a service as we normally talk about it. The bullet "server = service" focuses on the intent to give customers the option to have services run on either on premise or in the cloud. The idea of supporting multiple PCs and devices, is very much what I've discussed under the heading "Software above the level of a single device." Devices cited include the PC, phone, car, game console, camera, and even wristwatch. There's an emphasis on rich client experiences. The trend that Macromedia started a few years back, that AJAX has fueled, is front and center here, but with an emphasis on the seamless cross-device aspect. Finally, we hear about the integration of internet services as a fundamental part of everything, with P2P, and not just web, being a core part of what is discussed.
 

(The only key Web 2.0 theme that's a little light in the presentation is what I've called "harnessing collective intelligence." There are a couple of places where it's hinted at, as in discussions of instrumenting applications to learn what features users choose and how they use them, but it's far less a theme than its importance merits.)

We then move to the formal announcement of Windows Live and Office Live.

Windows Live is described as Internet-based personal services, centered on the individual, focused on communication, information, and protection. It's a separate offering from Windows. We are reassured that there will be published interfaces, with competition in offering services. MSN continues as a "programmed content portal." It will not go away, but lots of the services will move into Windows Live. Ad supported, with upsell to subscription for other aspects.

Extensibility, bringing in the developer and user content ecosystem are emphasized as themes. The products are positioned as "natural complements to Office and Windows." They don't replace Windows or Office, and are not required.

Office Live: "Internet-based services for growing and managing your business online.... A focus on online presence, business automation, collaboration, with an initial focus on small business. A level that is ad-supported, with a superset of services offered by subscription."

Bill G: "We're at an inflection point characterized by software plus service, with opportunities for everyone. Ray Ozzie is the key person at Microsoft pulling all this together."

Ray Ozzie

Ray comes on, talks a bit about his history at Groove, how it started with a vision of integrating internet services into software, and how excited he is to be bringing that vision to fruition at Microsoft. Ray emphasizes three trends:

1. Seamless user experiences
2. New internet-enabled methods of adoption and delivery
3. Emergence of new internet business models based on advertising.

Ray emphasizes: "Microsoft cannot do it alone. Our products are going to be open, we're going to be releasing them progressively and quickly, and we're going to be engaging with developers to build on what we do."
 

Ray describes how his experience at Groove taught him how much people value the ability to work together seamlessly. There are boundaries around organizations, seams around technologies, which block our ability to realize the full potential of our computing environment. So the focus on seamless user experiences is designed to ease the boundaries between multiple devices, multiple people, people in multiple roles. Ray cites iTunes as a model for the seamless weaving of a hardware device, a software layer, and internet services. Suggests that Xbox 360 Live is another example of this kind of seamless weaving.

In enterprises, the seamless experiences is a real challenge. It was hard enough just with the previous generation of enterprise software, but now we've got mobile devices, service providers, and software applications with lots and lots of seams between them. Describes the difficulties of communication with the Red Cross after Hurricane Katrina. People wanted to focus on the issues, and connecting with the right people, not fussing with the technology. "Seamlessness means software that just works."

Ray also talks about how the Internet has changed the software adoption and delivery model. It's now possible to get products out very quickly via grassroots demand fueled by online conversations. We also have the ability to measure what works. Offering multiple versions of a feature, and seeing what happens (what I've called "the perpetual beta") is familiar now on websites, but it can be done with software as well.

Finally, Ray talks about the advertising opportunity. He starts out with the obligatory disclaimer, that software industry revenue models are quite robust. That said, Microsoft believes that there are significant revenue growth opportunities in online advertising. Currently online advertising is a $15B market, but many think it will grow to $150B by 2015. Microsoft is impressed by what Overture (Yahoo!) and Google have done, but believes that as an industry, we've only scratched the surface of what's possible.

Ray talks about the "Ad Engine" as a fundamental platform technology. Microsoft has outsourced much of its previous ad services to Overture, but they've been testing their own offering, Microsoft adCenter, in Singapore and France. A lot of powerful work from Microsoft Research has gone into this. They will be applying adCenter to offer relevant advertising on the web, in their Live Software offerings, He reminds us that Microsoft has significant online presence already: 400 million consumers per month, 35 million small businesses per month, 44 million information workers.

Again, Ray returns to the ecosystem them, emphasizing that "We will compete responsibly, based on features, price and services." All APIs will be published, allowing other developers to offer competing services.

Demo of Windows Live - Blake Erving

Blake starts out once again by describing MSN as "programmed content" vs. the customizable experience of Windows Live. WL is centered around the search experience. He starts with a screen populated only by a search box. Searches for cycling. Bummer. The demo gremlin strikes, and he has to reboot. Ray comes back out while Blake goes off to work up the demo again.

Ray points out that some say that the internet itself is the platform, and in many ways that's true. The internet has always been described as a network of networks, and it's now becoming a platform of platforms, as every web site is potentially a platform. But he argues that there are no standards today about how sites cooperate on standards and customer intelligence that would allow people to use services across sites. Of course, there is RSS, "the Unix pipe of the internet", which allows for data to be integrated from one site to another. But there's a lot more to be done in terms of integrating data from site to site. He reminds us that many of the same things happened in the era of the GUI. Until we developed standards, interoperability was difficult. Microsoft's intention is to develop a platform that allows applications to cooperate. Key services will include storage, synchronization, identity, advertising, and payment. RSS will be woven through everything. Ray reminds us again that Microsoft is looking to create mechanisms that will allow developers with domain specific expertise to build workflows, forms, and other types of information applications.

In passing, Ray mentions that MSN Spaces a great underlying technology, that has very quickly gotten up to 25 million users. He also mentions harnessing the "8 billion relationships stored within Messenger today."

Blake comes back and picks up the demo. He picks some search results to have appear regularly on his page, so that they become part of "My Web." Shows the integration of RSS subscriptions and podcasts. So far, it's a lot like MyYahoo! But then he starts adding various bits from Microsoft applications, such as Recent Documents, Sharepoint, Windows Live Safety Center (which scans and cleans "internet debris" from the PC). He also adds in a mail inbox from the Windows Live mail service.

"Windows Live Mail is a brand new AJAX-based offering, built from the ground up." Users will be able to get Windows Live mail email addresses or use other domains. He gives the usual song and dance about AJAX: It works just like a desktop client, but it's on the web. Meanwhile, it has all of the web benefits, such as collaborative identification and reporting of phishing attacks, or integration of internet-enabled spell check. Ads served up on the side.

Windows Live Messenger another new offering. Nice: "This isn't just an IM list any more." We show all your contacts, not just your buddies. (They've increased the number of buddies from 300 to 600 - not sure how to reconcile these two comments.) Integration of social networking, looking at the "friend's list" exposed by ANY contact on the list. Very nice. Users given control over how much info is shared, even there. Also mentions "LiveContact" -- Plaxo-like services built in.

Demos how his mom can change her contact card, and it changes in real time on his connected Windows mobile phone.

Shows "Live Files" - shared files for which updates propagate to all copies, much as in Groove?

Windows Live Local. Nice demo of search against a map. Searches for Transamerica in San Francisco. Zooms in, then flips to "bird's eye view" -- the aerial photographs introduced at our Where 2.0 conference. Then searches for cuisine near that location, gets search results, rotates the view to actually see the entrance to the restaurant. Then sends an email to a friend that will produce the same live map. Make a call to a new number (e.g. the restaurant just selected from the map.) Places the call using VoIP from a soft phone popped up right from the mapping application. Nice integration of mapping with other system services.

Microsoft Gadgets. A platform for third party data widgets very similar to Mac OS X Tiger's Dashboard, but integrated with Windows Live.

Now we move to an Office Live demo from Rajesh Jha, general manager of the information worker group at Microsoft. I can't keep up, but this looks like a salesforce.com platform competitor. Collaboration service, connecting 22 different business applications. Sharepoint and Groove-like services at the heart of a new vision for collaborative business applications. A real focus on applications created by vertical market business partners.

Demo of a real-estate application based on Virtual Earth integrated with all kinds of business data services for real estate investors and brokers as an example of the kinds of vertical apps that can be built. Looks pretty nice.

Overall, leaves me with a lot of optimism that Microsoft is fully engaged with the right problems, and we'll be hearing a lot more from them.