Microsoft News Tracker

Nicholas Carr is providing this weekend’s Microsoft buzz with a rumor that Microsoft is getting ready to roll out a Web apps strategy if not necessarily any actual apps:

Put your ears to the ground, my friends, for the Beast of Redmond may be stirring. I’ve heard that Microsoft has begun briefing its large enterprise clients on an expansive and detailed strategy for moving its software business into the cloud. If the report proves correct - and I make no guarantees - the company will unveil the strategy to the public either next week or the week after.
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The new strategy will, I’m told, lay out a roadmap of moves across three major areas: the transformation of the company’s portfolio of enterprise applications to a web-services architecture, the launch of web versions of its major PC applications, and the continued expansion of its data center network.

And in the latter regard, Carr has a double header - Rumor: Microsoft set for vast data-center push:

I’ve received a few more hints about the big cloud-computing initiative Microsoft may be about to announce, perhaps during the company’s Mix08 conference in Las Vegas this coming week. One of the cornerstones of the strategy, I’ve heard, will be an aggressive acceleration of the company’s investment in its data center network. The construction program will be “totally over the top,” said a person briefed on the plan. The first phase of the buildout, said the source, will include the construction of about two dozen data centers around the world, each covering about 500,000 square feet or more. The timing of the construction is unclear.

You can’t have a good cloud strategy without plenty of capex, of course, but what with the Yahoo acquisition this seems like a fairly stressful time to be raiding the piggy bank. It’s a good thing Microsoft has all those old-fashioned operating systems and offline applications to foot all these bills.

Less snarkily, if these rumors pan out, it will be interesting indeed to see how Microsoft manages to finesse “software plus services” to avoid killing the cash cows while simultaneously avoiding owning some large buildings stuffed with unused computers. And no, I won’t complain about all the times Microsoft disparaged Web apps.

Related: Michael Arrington reports a rumor that Microsoft may also be announcing at Mix08 an offline version of Silverlight to compete with Adobe Air for the Rich (and occasionally offline) Internet Application business.

Coincident with Microsoft’s announcement today responding to all the online Web office application bustle, Adobe jumped into the game by announcing the acquisition of Virtual Ubiquity, a vendor with an online word processing application conveniently built on Adobe RIA tooling, and also announced an online file sharing service.

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I guess snowballs are now safe in Hell. Yesterday, Microsoft and Sun Microsystems announced that Sun is now a Windows Server OEM for their x64 systems with Windows Server 2003 R2 to be available preinstalled within 90 days. It’s no surprise that Wintel commoditization is hitting the server market and squeezing the proprietary vendors - the real question is why Sun chose this point in time to embrace Wintel. Peter Burrows at Business Week offers some theories, but the only one that strikes a chord with me is that Sun views it as an opportunity to spread their hardware fixed costs over bigger volume with perhaps a bit of comfort for customers that buying from Sun doesn’t lock them into an evolutionary dead end.

Anyhow, according to the PR, it is all an expansion of the Microsoft-Sun settlement/alliance announced in April 2004 and included these other talking points:

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First, AOL decided to give away their basic membership services free to broadband users (press release here). Then they announced a plan to offer 5GB of online storage free to all comers (press release here). It turns out they were just getting started.

On Monday - AOL Launches Free Anti-Virus Program for All Online Users:

AOL today launched a new free anti-virus program — called Active Virus Shield — for all online users at no cost. Active Virus Shield is powered by Kaspersky Lab, one of the largest Internet security solutions providers in the world, and offers advanced detection technology to stop viruses, spyware, malware and Trojans before they attack, as well as real-time scanning of files and email. The software automatically updates every hour, offering an easy and convenient way for consumers to protect themselves from the thousands of new Internet threats created each month.
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Active Virus Shield can be downloaded at www.activevirusshield.com
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Active Virus Shield is free of charge, and there is no obligation or AOL membership required to use it. Active Virus Shield works with Windows XP (home & Professional), NT, 2000, ME, & 98, Internet Explorer 5.5 and above, and requires about 50MB of spare disk space.

This seems to be a subset of the “Total Care” package that AOL was rumored to be working on and the description makes it out to be a fairly conventional antivirus offering, presumably one of Kaspersky’s standard products. It doesn’t have all the bells and whistles of Windows Live OneCare, but it gets a user a lot of the way there and it’s free which undercuts even Microsoft’s lowball OneCare pricing and has a cachet all its own:

“Antivirus protection is too important to make people have to pay for it,” an AOL representative told CNET News.com in an e-mail interview.

Indeed, but wait, there’s more! Today, it was announced that AOL To Offer Personalized Email Domains for Free to All Web Users:

AOL today announced that, starting in September, it will make personalized email domains available for free to all Web users. AOL is the first company to offer this service, which will be called AOL(R) My eAddress, at no charge.

With AOL My eAddress, anyone can set up and register a completely customized email address using .COM or .NET domains, and add up to 100 additional identities onto their personal domain, all at no charge. For example, someone could choose a domain that family, friends, teams, social organizations and others could use, for example anyname@mygroupname.com,” and other members within that group could have their own email identity using that domain. Or, Individuals can also choose to set up a new personalized address with the popular and widely-used AOL.com domain, at no charge.

Consumers will be able to use their personalized My eAddress domain as an email address, as their AIM(R) address to send and receive instant messages and access their Buddy List(R) feature, to access features across the AOL network, and, coming soon, as the address of their own personal Web page on the free AIM(R) Pages social networking service.
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– Setup, registration and the use of a My eAddress email domain and identity is all free (one domain per user), as is the ability to invite other people to join their personalized domain. Each account holder can add up to 100 additional personal email identities associated with their domain, all managed through an easy Web-based control panel.

At first blush it appears to be the equivalent of Windows Live Custom Domains, but it has a critical difference. With Custom Domains you show up with your already registered domain name and Microsoft gives you email. With My eAddress, it appears that AOL is going to be registering and renewing the domains for their users for free much like Microsoft does with Office Live Basics. I guess domain registration is now the new loss leader in the consumer space as well.

Update 8/10: Kevin Kelleher at The Street.com thinks that AOL’s free domain offer is one of the reasons that domain registrar GoDaddy canceled its IPO.

Jay Greene and Peter Burrows, with Steve Hamm at BusinessWeek online:

A How-To kit for the ideal PC has been making the rounds of leading design shops. It calls for “accelerated curves” and “purposeful contrast.” The preferred colors include a shade of black called Obsidian and a translucent white dubbed Ice. “We want people to fall in love with their PCs, not to simply use them to be productive and successful,” reads the enclosed booklet. “We want PCs to be objects of pure desire.”

Doesn’t sound much like Microsoft (MSFT), does it? But it is. BusinessWeek has learned that a team of 20 in-house designers has been working quietly for the past 18 months on an elegant new look for PCs that will run Microsoft’s next operating system, Windows Vista. It’s a major departure for the company, which historically has left design to the likes of Dell (DELL), Hewlett-Packard (HPQ), and Gateway (GTW). Persuading the hardware guys to embrace the toolkit won’t be easy. They’re already working overtime to build better-looking gear on their own.

Microsoft for years has pushed their functional specifications on OEMs via the Windows Hardware Engineering Conferences and other mechanisms, but style?

Microsoft is no newcomer to hardware design, of course. The company has made PC mice and keyboards for years. The Xbox game console has been a hit. Microsoft is working on a music player, Zune, that it hopes will rival the iPod.

Microsoft’s mice and keyboards are nicely done, but they’re a niche and the Xbox 360 was created with significant outside design help. I expect that the same is true for the Zune, so it’s not quite clear exactly what Microsoft brings to the table. More to the point, the PC business has some tough cost strictures:

But trying to transform the PC ecosystem—even peripherals makers such as Logitech received the kit—takes things to a whole new level. It reflects the fact that the economics of the computer business is changing. The PC world used to be divided into two camps: those who made lucrative software and the poor schlubs who built the low-margin hardware it ran on.

Apple has turned that model on its head. From the beginning it has managed to create a unified design for its products by building everything itself, first with the Mac and then later with the iPod. Although Apple sells one computer for every 20 PCs, the iPod’s success has proved how crucial it is to create a seamless experience for consumers, who are buying much of the gear these days. Says a top PC design executive: “You’re going to see more and more of this desire to integrate hardware and software.”

I’ll buy that, but it’s not clear to me how a color scheme will make the experience seamless - I would have thought the seamless part would start a little closer to Redmond. Besides, if you really want something snappier than a beige box, you don’t have to look too far (e.g. [1] if you like bright lights). It sounds more like Microsoft is worried that the OEMs aren’t following their functional “suggestions” in lockstep and the styling suggestions are just a bonus.

Hit the link for much more, but the big PC makers aren’t exactly jumping for joy at the chance to further commoditize their products. When all Windows PCs are the same except for the manufacturer’s logo, their margin inevitably goes to zero. I do wonder though if Microsoft has any thoughts of ditching their pesky partners on PCs, just like they did on personal media players with the Zune? It would make the Apple emulation complete.