Microsoft shifts focus from Windows to Web

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Where does Microsoft want to go next? Analysts as well as media and software developers will have to wait until June 22 to find out. That's because the software giant postponed its annual strategy conference, this year called Forum 2000.

Microsoft decided to put off the gathering because a final decree in the company's antitrust case could come as early as this week.

U.S. District Judge Thomas Penfield Jackson, who ruled Microsoft Corp. is a "monopolist" power, intimated in a May 24 remedy hearing that he favored breaking the company into three pieces: Operating Systems (Windows), Applications (such as Office) and Internet businesses (MSN).


That makes for a daunting marketing challenge. Given the uncertainty, insiders and analysts said it will be difficult to execute any marketing and branding initiatives.

At the Forum 2000 conference, originally set for June 1, Microsoft executives were to outline a major business initiative, dubbed Next Generation Windows Services, which is designed to lessen the company's reliance on its core Windows operating system. The software giant sketched the broad outlines of the initiative last fall, but is expected to paint a more detailed picture of the Web-distributed software and services strategy at their annual conference.

The initiative would combine existing Windows-based software with a new generation of Internet software to offer businesses and consumers a suite of Web-delivered services such as credit, security and instant messaging along with seamless integration with mobile devices. The Web-distributed software system also would enable "trading communities" -- groups of buyers and sellers -- to power business-to-business and consumer e-commerce.

At issue: nothing less than the repositioning of Microsoft and its ubiquitous identification with Windows. Analysts and insiders said Microsoft must establish itself as a leader in emerging Internet software platforms that it does not currently dominate while maintaining, growing and ultimately migrating its Windows-based desktop computing franchise to a new Web-based model.


Microsoft's Windows remains a linchpin. Last fall, Microsoft launched Windows 2000 Professional. A campaign from McCann-Erickson/A&L, San Francisco and New York, touts both the product's Internet capabilities and Microsoft's role partnering with Net companies. It remains unclear how the campaign, tagged "The Business Internet," will dovetail with the NGWS initiative, or how Microsoft will flag NGWS themes as the company sets marketing plans for its fiscal 2001, which begins July 1.

"We will talk about the future of our platform, the future of applications and services and developer tools," said Greg Shaw, a Microsoft corporate spokesman, referring to Forum 2000. "We will talk about the creation of software that allows you to connect anywhere, anytime, any device."


But Microsoft's "anywhere, anytime, any device" rallying cry is more than a year old, and analysts say the company now must implement that and demonstrate how such seamless integration and communication between devices will work.

"There are branding issues and considerations," Mr. Shaw conceded. "How do we make the vision clear and simple, and how do we demonstrate the clear benefit we know it brings?"

Insiders suggest that Microsoft will coin a name for NGWS soon that seeds an umbrella theme and perhaps a new Internet services brand. A Microsoft advertising executive declined comment, citing "premature" timing.

"Microsoft needs to shed its image as a Windows-only and Windows-focused company, and build one as a computing, tools and capabilities vendor, coupled with a business services and content creation company," said one analyst, who declined to be identified.

Microsoft, he said, increasingly will align itself with the movement among software developers to build systems with open standards such as Linux.


If Microsoft positioned itself as an open standards company, offering multiple operating systems from multiple vendors, it could make it more difficult for pundits and federal regulators to claim the company is extending its desktop monopoly.

Still, some remain skeptical that even a move toward open standards would solve the company's image problems.

"They're still trying to extend the standards in a Microsoft way," said Dan Kusnetzky, VP-system software research for International Data Corp. "I think they have trouble from a marketing perspective because they've used a technique called `surround and conquer.' "

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