Ray Ozzie memo: Microsofts Services strategy

Dave Winer has posted 2 e-mail memos, from Bill Gates and Ray Ozzie, on the next step forward for the company.

Clearly Ray has had time to talk to the product teams, senior management and developers and has finally taken stock of the situation.

Ray Ozzie mentions some key tenents:

1. The power of the advertising-supported economic model.
2. The effectiveness of a new delivery and adoption model.
3. The demand for compelling, integrated user experiences that “just work”.

Fundamentally, Ray's memo is a more than just a call to developers and product teams about service-enabling their assets. Its a an action-plan. Driven by end to end user-driven scenarios, something that Ray is very good at, from these use-cases, he will drive architectural design decisions and map that to current and fututure products/services.

I think this is not a good time for Microsoft, yet you can't but feel that finally they have someone at the top of Microsoft that actually gets it. What Mcirosoft has delivered as Ray has said is a 80% solution. In the post-"Vista/Office12" wave we will see a fantastic level of seamless integration of technology that weve not seen before, his past efforts with Notes and Groove should give us some inclination of the potential.

I have still some doubts though; Microsoft needs to balance Enterprise revenue models with Consumer/advertising revenue models. There needs to be harnomy between product and services -- the old mindset to lock-in services and products just won't cut it.

Windows "Live"

Fantastic! -- Reported by TechCrunch. Its Windows even when its not Windows! "Windows Live (beta)" is Microsofts go-to-market branding that will encompass its next geneartion SAAS (Software As a Service) strategy.

Its the harmonisation between Microsoft Windows, Microsoft Office applications, and Microsoft Services (Windows Live). We have seen this brand used in "Live" Meeting and XBOX "Live".

As Ray Ozzie mentioned here, the iPod and the Blackberry were "perfect examples" of how to create a tightly designed user experience from hardware, to software to services.

I think we will see a great example of that with the XBOX 360, a huge investment by Microsoft which goes beyond just gaming, it could easily become the centre-point for many of Microsofts other strategies around building tightly coupled hardware/software/services.

In terms of the announcements yesterday?
- early 90's - Microsofts energy was put into creating Windows "New Technology" (NT)
- mid 90's - Micorsofts energy was put into embedding Internet/Media experience into Windows.
- 2000's - Microsofts energy was put into .NET and Web Services strategy.

They stumbled a bit after that, and had this grand vision of connection people, devices, and services through "hailstorm".

The last 5 -years has been painful partly through trying to converge technologies streams into a big bang product roadmap, most of which will be released soon, .NET 2.0, Visual Studio 2005, Vista, SQL 2005.

But in the next 5-years, we'll see Microsoft tinkering less in that space, with putting more of a concerted effort on the User experience (not User Interface / not Product!) but my Identity, my Devices, my Work, my Perrsonalisation and my Events.

We will see a new abstraction of "the Windows API". It won't be Win32 or WinFX. But more likely WinLive Web Services API. All XML based contracts.

Ray Ozzie spent a long time talking about Ad Revenues being a $150bn industry by 2015. So wheres the lock-in? That bit is not clear. You'll still need Windows to truly use these Services. Microsoft needs to tread carefully here, but i suspect they are realising that lock-in through their software platform (to generate license revenues) isn't going to run in the long-term (not outside the Enterprise anyway), its going to be about converting users into revenue generating consumers for advertisers.

MSN used to be a place where Microsoft used to place executives before retirement. If i were to believe how Microsoft is positioning MSN against Windows Live, its clear to me one is designed for syndicated content (where current advertisers are at) and the other eventually will become the place for contextualised content (and where advertisers might go to in the future.)