REDMOND, Washington: Microsoft Corp. is charting its way to a greater presence on the internet, turning the focus away from its mainstay software development. The company revealed Thursday its plans for a "new era" that lays greater emphasis on the proposed Windows Live program that integrates its software products with services on the internet and a music player that will take on Apple's iPod.
The company entertained analysts at its headquarters giving them a peek into the activities planned in the light of the changed environment. Chief executive Steve Ballmer, along with Ray Ozzie, who is assuming Bill Gates' role of chief software architect, outlined the company's new vision, which lays a lot of emphasis on Windows Live, in online advertising business and in incorporating advertising in games and online video.
Ballmer reminded the analysts that Microsoft has been a desktop company, but this identity is changing. "We're trying to build two new cores, one in online and one in entertainment," he said.
Ozzie presented a vision for the company in which internet-based services and not PCs get predominance. He talked about the new online value delivery model, which has changed the entire technology industry prospects and said Microsoft is now planning its technology products keeping in mind this changed circumstances. "In a previous era – in the PC era – Microsoft would naturally begin with a PC mindset. We're in a new era – an era in which the internet is at the centre.”
While this "fundamental and transformational shift to services" has deeply impacted Microsoft, it is also about to "turn the technology industry on its head," forcing other companies to re-evaluate their businesses, he added.
Ozzie's reference to the post-PC era came at a Microsoft annual analyst meeting where Gates could not for the first time attend. Gates, as everyone in the computing age knows, had been insisting that the PC's dominance of the tech industry is not receding.
Ozzie gave details of the plan that puts Windows Live, the bouquet of online services that includes its e-mail, search and other main internet-based services, at the centre of its business. He said Windows Live, which will comprise several branded services that are now being operated under the MSN name as well as new services, will become "the hub” through which Microsoft delivered all the technology-driven experiences that users valued.
The company announced that it is planning to spend "hundreds of millions" of dollars in the next three to five years to develop a worth competitor to iPod, which the company calls Zune. The device will be built on social networking capabilities allowing people to share music and video using wireless connections.
Robbie Bach, Microsoft's president of entertainment and devices division, said a version of Zune should be ready for sale this fall in the U.S. and several versions will be marketed in 2007. The company will develop both the hardware and software for the device.
The company intends to include advertising into its games for the Xbox gaming system by placing products or company brands into game scenes. It is also experimenting with ways to incorporate ads into video. In a demo at the conference, the company displayed a video of the TV show "Sex and the City" that contained information on the designer clothes worn by the show's star, Sarah Jessica Parker, and how much they cost.
Meanwhile, analysts who attended the meet appeared to get the notion that the much-delayed launch of the latest update to Windows -- Vista -- could get further delayed beyond the January deadline.
In a presentation at the conference, Kevin Johnson, co-president of Microsoft's platform and services division, was less specific: "We will ship Windows Vista when the product is ready," he said, adding that Microsoft would take the project "milestone by milestone".
The meeting ended with an assurance by Ballmer that the company would make sure it releases new Windows versions more quickly. "We will never have a five-year gap between releases of flagship products," he said, referring to the gap between Windows XP's October 2001 release and the debut of Windows Vista, currently slated for January.
