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Windows, the next generation to show in June – for rent

It's a Blockbuster, if you see what we mean...

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Microsoft is to release details of its next big project, Next Generation Windows Services, at Forum 2000 in Redmond on 1st June. NGWS is the big project Bill Gates allegedly stopped running Microsoft to supervise, but since it was first mentioned in his resignation release in January, very little information on the project has escaped, and the grand announcement itself seems to have slipped a bit.

But although we don't know much about the nuts and bolts, the concept's really not a secret. Microsoft intends to present NGWS (or whatever it's really going to be called) as a Web-based services platform, and as we said back in January, this means spreading what you call Windows out into a far broader set of clients and platforms that's all held together by the good old, MS-owned back end. And it's also something you're going to have to rent, not buy.

That's not all we know. At a Gartner conference last October Steve Ballmer cunningly went quite a distance in describing NGWS three months before Microsoft mentioned the tag, and last month both Ballmer and Gates came up with more information in an interesting Newsweek piece by Steven Levy, although the NGWS content of the article wasn't particularly widely noted.

Price is maybe one of the better bottom lines for us to start with, and here's what Ballmer told Levy: "Believe me, if you give customers a good experience they will be happy to pay. I'm not sure they'd pay 30 or 40 bucks a month, but they'd pay 10 bucks a month."

And Ballmer's definitely talking about NGWS here. This is how Levy, who seems to have been well-briefed by execs in addition to Ballmer and Gates, describes NGWS: "The Microsoft vision is to replace the bulk of its software with a collection of dynamic 'services' that makes it easy for customers to access and manipulate information spread out over the Web... By making use of ... XML... it's possible to use that data as smoothly as you can massage the numbers in your own little spreadsheet at home. A whole new set of possibilities open where minutiae stored in the bowels of Web-connected databases get integrated into your life."

So the client Windows OS you use today becomes less relevant or even disappears, and "Windows" becomes a large pile of cross-integrated service platforms out there you have to rent. At $10 a month per user, that amounts to a tidy sum. Say you buy a new PC every two or maybe three years, and the revenue MS gets from the PC company is $50 a pop. That works out at $17-25 per users per year, whereas a wholesale switch to NGWS rental would deliver $120 per user per year. To be fair, NGWS has got to include a lot of services that you'd already pay for over and above your OS licence, but it still looks promising, revenue-wise.

Here's Levy again: "Microsoft engineers are busily rejiggering familiar programs like Windows and Office so that your software itself, and even the information you once kept snug in your disk drive, will be spread over the Web." There, you're getting really worried now, aren't you?

This stuff is actually the same stuff as Ballmer talked about at the Gartner conference. Then, he said Microsoft would move from a packaged software sales model to a service one, and as we noted at the time, the service model he envisaged was not the traditional one, but one that would depend on a high level of automation and integration. If the client software can heal itself, get its own updates and so on, then Microsoft just has to keep the servers running and haul in the money. This is clearly not about on-site service. Then, Ballmer said he wasn't sure whether to charge a monthly rental or for use, but now he seems to have made up his mind.

In October he didn't give a time scale, but he's likely to do that next month. And bearing in mind that NGWS isn't a new OS, but a tying together of practically every product Microsoft has, it could kick off in some form quite quickly. The Newsweek piece suggests, interestingly enough, that MSN will turn into a launch platform for NGWS, so actually some of it has probably engaged already, without anybody noticing.

But even though the components are a lot more 'there' than you might expect, it'll still be a tricky one to announce, given the other stuff that's going on around it. A next generation Web platform that ties together everything that Microsoft does is really going to impress the antitrust authorities in Europe and the US, isn't it? ®

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