In 1995, Microsoft added a free Web browser to its operating system in an attempt to fend off new rivals, an effort ultimately blocked by the courts.
This week, it plans to turn that strategy upside down, making available free software that connects its Windows operating system to software services delivered on the Internet, a practice increasingly referred to as “cloud” computing. The initiative is part of an effort to connect Windows more seamlessly to a growing array of Internet services.
The strategy is a major departure for Microsoft, which primarily sells packaged software for personal computers. With this new approach, Microsoft hopes to shield its hundreds of millions of software customers from competitors like Google and Salesforce.com, which already offer software applications through the Internet.
Microsoft’s new Windows Live software suite includes an updated electronic mail program, a photo-sharing application and a writing tool designed for people who keep Web logs.
The new service is an indication that Microsoft plans to compete head-on against archrival Google and others, and not only in the search-engine business where it is at a significant disadvantage. Instead, Microsoft will try to outmaneuver its challengers by becoming the dominant digital curator of all a user’s information, whether it is stored on a PC, a mobile device or on the Internet, industry executives and analysts said.
Millions of PC users already rely on Web applications that either provide a service or store data. For instance, Yahoo and Google do their own forms of cloud computing, offering popular e-mail programs and photo-sharing sites that are accessible through a Web browser. The photos or the e-mail messages are stored on those companies’ servers. The data is accessible from any PC anywhere.
Hundreds of companies in Silicon Valley are offering every imaginable service, from writing tools to elaborate dating and social networking systems, all of which require only a Web browser and each potentially undermining Microsoft’s desktop monopoly.
Google, the most visible example, took cloud computing a step further last October and directly challenged Microsoft by offering a suite of free word-processing and spreadsheet software over a browser.
“To the extent that the industry is moving toward an on-demand business model, it poses a threat to Microsoft,” said Kenneth Wasch, president of the Software and Information Industry Association and a longtime Microsoft adversary.