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Ray Ozzie, the man leading Microsoft's comeback

Microsoft chief software architect takes on Google

Ray Ozzie's ambitious plan to revitalise Microsoft's software, beef up its services, and kick seven bells out of Google.

More than just a technical shift

In a nutshell, Ozzie's strategy is to offer customers the benefits of Google's cloud computing approach without forcing them to give up the processes, practices or software they use now.

It's an intriguing message, and while some might argue that Microsoft's efforts to tie its desktop software more closely to its online services is reminiscent of the company's longstanding practice of integrating product lines to encourage cross-selling (and thus lock-in), the benefits of 'software plus services' may prove too compelling for customers to ignore.

The ad-supported versions of the Office Web Apps will undoubtedly appeal to consumers who are considering free Office competitors, such as Google Docs, Zoho and OpenOffice.org.

In addition, customers will no longer need to purchase the full Office suite if they only occasionally open, print, or make small changes to Office documents that contain complex formatting.

That should particularly please Linux users, who until now could only run - with difficulty - older versions of the Office suite with the assistance of the Wine Project.

Microsoft's move to offer subscription-based, hosted versions of SharePoint and other server software should also meet approval.

Small and mid-size businesses that worry about their ability to manage and maintain servers for back-office functions should be particularly intrigued, but according to a recent IDC study, usage-based pricing models are increasingly attractive to many enterprises.

But perhaps the most significant aspect of Microsoft's new strategy may be how it changes the nature of the software giant's relationship with its customers.

Rather than the annual sales cycle of yesterday's software industry, Microsoft plans to capture revenue from its customers on an ongoing, 24/7 basis - whether from software sales, usage-based subscription payments, or ad impressions.

That idea is sure to make some customers nervous, but Microsoft's strategic shift could also have unintended positive consequences.

For one, the need to reach a wide audience with its online services to increase ad revenue could encourage support for open web standards at Microsoft, which could lead to better standards compliance in future versions of Internet Explorer.

More fancifully, revenue from subscriptions, advertising, and the Azure platform could reduce Microsoft's dependence on its software cash cows.

Freed from the need to guard its proprietary software portfolio jealously, Microsoft could then pursue improved relationships with the open-source and open standards communities.

Microsoft claims to be "committed to building bridges to other software providers, including open source technologies and products", and the company has made a few conciliatory gestures toward the open source world as of late, such as funding the CodePlex Foundation.

But a more genuine, less patronising effort would be welcomed (even if past sins will not soon be forgotten).

NEXT PAGE: Too big to succeed?

  1. Just what has Ray Ozzie got up his sleeve
  2. Ozzie rules
  3. Taking Office to the web
  4. All roads lead to SharePoint
  5. Microsoft's datacenters are your datacenters
  6. More than just a technical shift
  7. Too big to succeed?

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