Microsoft turns to services and Web 2.0

The discussion of Web 2.0 continues, adding to the current buzz around Microsoft’s pursuit of a services-based operation to bolster its Windows and Office products.

The days of the killer application are gone, says PCWorld. The success of Windows may now be an encumbrance to Microsoft as it faces the need to carve out new niches for itself in the emerging multiplex of markets often referred to as Web 2.0.

What we’re going to see Microsoft attempt to do is move away from a packaged software model and sell everything as a service,” said Dan Kusnetzky, Vice President of system software research at research firm IDC. “Microsoft wants to make sure people pay Microsoft for any use of computers anywhere. It’s a very clever, intricate strategy based upon control and ownership of low-level things like APIs (application programming interfaces), tools, communications protocols, and file formats.

Recent clues to this new direction for the software giant include :

1. The reorganization of the company into three divisions, one of which is services strategy.
2. The new importance given to MSN, the company’s web-services portal.
3. The new requirement for Enterprise customers to buy Software Assurance when Windows Vista comes to market.
4. Microsoft’s interest in VoIP (Voice-over Internet Protocol), a web-based telephony service.

Biggest rival Google is busy buying up bits of fibre-optic cable around the U.S. as a means of extending its reach into telephony. Google Talk and a WiFi project have added pieces to the jigsaw. Microsoft executives know they must counter and keep up.

Update: Ken Yarmosh is running a “Blogoposium” today, Wednesday. The idea is that you blog something on Web 2.0 (thin clients etc.) today and tag it in Technorati : blogoposium1. All articles will then appear on the same page.