LXer Feature: We should celebrate Live.com

By now you are probably aware of Live.com, Microsoft's rather underwhelming entry into application service space on the Internet. It consist of 7 applications developed for MSN cobbled together under a new umbrella, but they have great plans and we should wish them lots of success.

Why would the Linux/Open Source community wish Live.com to be successful? Because if it becomes moderately successful it nails their colors to the mast and they can't reverse course. Web-based services create a level playing field with MS having no advantage over Google or Yahoo. Additionally, Microsoft is late in the game and they won't do a repeat performance of joining the Internet late as they did in the mid-1990's. Let's made sure you understand: They are late to the business, don't have enough .NET talent, haven't seen success converting VB programmers to C# and their entries have little appeal.

Every move from a client based traditional application solution is a move from a world where Microsoft enjoys a monopoly based profit to a world where they have to compete on equal footing. They have demonstrated they don't know how to compete on a level playing field. They will still be able to make money but not hog almost all the profit in the industry. Their margins will fall from 50%+ to 20% at best.

Their lock-in Key will obviously be file-formats and to what extent they can leverage Windows and Office to try and protect the old monopoly. What Gates and Ozzie presented is browser-based with a surprising promise of Firefox support. This means that MS can not currently leverage the OS nor IE. They can obviously try and tie it closer to Vista later but this will be too late as any meaningful penetration of Vista will arrive in 2007 at the earliest.

Attempts to tie services to a proprietary file format will be met with significant resistance by users once it gains traction. Individual users will most likely concurrently use alternative offerings from Google and Yahoo which will learn to play well together. Secondly, everyone needs to interchange data with everyone else, closing that avenue once a threshold is reached. Think IM. Do you think we would have interoperability problems if AOL had the Google mindset back when they bought ICQ? Of course not, and that's a lesson learned. Everyone has learned from experience and have become much smarter than we were back in the early days of Instant messaging. Additionally, I don't believe the market will allow it.

Proliferation of web services is not good news for MS. They are damned if they do and damned if they don't. What we saw last week is a tepid defensive move by MS. But we need to wish them well. As Harvard's Clayton Christensen points out, "every time there is a major change in how we do things, the old strangle hold tends to lose out. The old style never disappears but is rendered irrelevant."

Could we hope for more?