Alan Goldstein: Microsoft reinvents self - again

Wednesday, June 28th 2000, 12:00 am
By: News On 6

REDMOND, Wash. - Whether you see Microsoft Corp. as an evil empire that crushes all in its path or as a benevolent industry leader that brings standardization to customers, the software giant clearly didn't achieve its market success by resting on its laurels.

Last week, Microsoft proposed a compelling vision for the technology industry that could make personal computers, cell phones, hand-held organizers and new generations of electronic tablets all work seamlessly together using software on the Internet.

And, oh yeah. Everything will work best if it's running on Microsoft's products and services.

Microsoft, now 25 years old, is reinventing itself - again. A decade ago, it was the broad introduction of Windows and graphics-based computing. Five years ago, it was an initiative to remake the company's products around the Internet.

Now comes the Microsoft.NET platform, or .NET ("dot-net") for short, which aims to create what is sometimes called a cloud of services on the Internet.

"When people use the .NET platform all of their information will be automatically available," said Bill Gates, Microsoft's chairman, kicking off a daylong conference for analysts and journalists at the company's headquarters in suburban Redmond, near Seattle.

"They won't have to move it around between different devices. They'll simply log in and it'll be there."

As an example, the company demonstrated a wireless phone under development at Samsung that could take a personal profile stored on the Internet - including a contact list, a calendar and electronic mail - and download it as soon as the device was turned on.

Many users of customized Web services like My Yahoo may quickly understand the advantages of this concept over what many people now do - maintaining what Mr. Gates called separate "islands" of data on different devices.

Of course, a cell phone and a desktop computer have different characteristics. The .NET platform would sense the type of device in use, such as whether it has a full-size screen or a small display, and show the information in a way that it can be visible and uncluttered.

In time, Microsoft said, it would transform its business model from dependence on revenues from packaged software to subscriber-paid interactive services.

Microsoft would operate more like a cable company or an Internet service provider. Consumers and businesses would pay a monthly subscription fee, perhaps around $20, for access to Microsoft services on any device they choose.

The devices could also work off-line, so someone could still use a laptop computer on an airplane or any computer other machine if the network is malfunctioning.

Customers could potentially choose services they want from a menu, just like with premium cable channels like HBO or phone services like voice mail.

The model could be far more convenient for customers because many programs would be downloaded automatically, including software updates and patches that fix bugs and security holes.

Clearly, a lot of computer users would embrace that kind of technology. For years, they have been complaining that computers are too difficult to maintain. They say they want technology to be as simple to use as it is in telephones, home electronics or automobiles.

But the Microsoft event was a success at another level, as well. Quite simply, it took the spotlight off antitrust troubles for a moment and focused it instead on the company's traditional role as an industry leader.

The event originally was going to be held on June 1, but it was postponed when a conclusion appeared imminent in the case. A federal judge ruled June 7 that Microsoft must be split into two companies to remedy its monopoly over the software industry.

"For me, the last three weeks have sort of made me almost like a caged animal," said Steve Ballmer, president and chief executive, joking with the group.

"We were ready to have this sort of come out of the closet. "Back in the closet,' the PR people said. "You really don't want to do this on that day.' "

One advantage to the delay is that in tone at least, executives seemed more chastened than combative over the company's legal troubles.

Mr. Ballmer said he is sometimes asked whether Microsoft is a "source of opportunity for entrepreneurs," or "a company that wants to suck everything up itself and have it all inside." He said Microsoft can't succeed unless it is a source of opportunity for others.

An important message seems to be getting through in Redmond.

Whatever the future of the antitrust fight, Microsoft will have to show it can play fair with competitors and partners. Even if Microsoft is best-suited to deliver on its own vision, certainly others will try.The Microsoft.NET concept will be too appealing to customers for the industry to ignore.

Technology editor Alan Goldstein writes about the Internet and electronic commerce for The Dallas Morning News.