Thu, Feb 07, 2002 page19

• Microsoft hopes to wield greater influence

  • AP
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  In its push to become more of a consumer products company, Microsoft Corp is pinning its hopes on a fledgling product line called .NET.

  Unlike most consumer products, this isn't something you can touch, buy outright or even explain very easily.

  Pronounced "dot-net," .NET provides services over the Internet. Early versions can remember a customer's credit card number for Internet purchases or alert a user to bids on online auctions.

  Eventually, the system could handle such things as arranging appointments and sending that information to handheld or personal computers.

  Say you are planning a trip to Africa. The system could buy your tickets through a travel agent, then access your doctor's records and tell you what immunizations you need. It could even arrange a time for the shots.

  On the day of your trip, it could alert you by cell phone if your flight is late, or if traffic to the airport is backed up.

  Such services could be accessed from any computing device.

  No longer would you need to juggle phones, Web browsers and e-mail at home or in the office. All your information would be available to you wherever you were.

  The .NET platform is key to changing the image of Microsoft, long thought of as a maker of business tools and operating systems.

  "I don't think consumers identify Microsoft broadly as a consumer company," said Steve Guggenheimer, Microsoft's senior director of business management. "We need to start to build an identity with ... how Microsoft helps make their daily lives better."

  But even Microsoft admits that will take time.

  It will be at least two years before .NET consumer services become widespread, Guggenheimer said, and perhaps 10 years before the ultimate vision is fulfilled.

  Charles Fitzgerald, Microsoft's general manager of platform strategy, describes Windows XP, the latest operating system, as "one of the first sockets" of the .NET plan.

  Eventually, he said, .NET will serve as a basis for connecting all sort of Microsoft products, from its e-mail service to its PocketPCs.

  "We used to build applications that basically were standalone islands," Fitzgerald said. "Now we build sockets that are designed to be sockets to a number of different services."

  On top of hearing music on Windows Media Player, a person could also buy music, be alerted if a particular band were coming to town, and get the chance to buy concert tickets -- all using Microsoft services.

  Other Microsoft products also will provide the tools for .NET. These include its MSN e-mail service and Internet portal, its MSN Messenger and even its Xbox game console and Office software.

  Microsoft is also fast building a customer base for Passport, a free system that can store online passwords and credit card numbers. In later incarnations, Passport will be used to store other personal information for .NET services, such as a calendar, medical records, bills or airplane reservations.

  Microsoft already has more than 200 million Passport users, in part because it requires accounts for services such as Hotmail and advanced Windows XP functions.

  To be successful, Microsoft will have to make people think of .NET as a basis for everything they do with computers, said David Smith, vice president of Internet strategy for Gartner Inc, a research firm.

  Smith believes Microsoft can succeed, given the weight it can put behind the effort through its already dominant products, including the Windows operating system.

  Others aren't sure.

  "It's a very complex, very corporate ... kind of concept they're trying to deliver to a market of folks that is used to thinking about things in terms of just going to the store and buying," said Rob Enderle, an analyst with Giga Information Group. "It's a market that's hard to convince and easily scared."

  Analysts say Microsoft still has to persuade people to pay for these Internet services -- a tough sell because Microsoft and other companies typically give away many Internet products.

  It also has to convince people their personal information is safe with Microsoft.

  Last month, chief software architect Bill Gates said employees an e-mail saying that security must become top priority for Microsoft products.

  The memo came after a major security vulnerability was found in Windows XP, the latest in a string of such troubles.

  High-profile privacy and security experts, including the Electronic Privacy Information Center in Washington, have already called on the government to investigate security and privacy concerns posed by Passport and .NET.

  But Microsoft's Guggenheimer said the Gates' directive didn't significantly change .NET plans.

  "The good news is that, .NET being a newer platform, has always had that at its core," he said.

  Finally, Microsoft has to worry about competition.

  America Online currently has a stronghold of e-mail and instant-messaging users and offers some similar services. Microsoft also faces competition from Liberty Alliance, a Passport-like service being created by Microsoft foes.

  While some rival products compete with some .NET services, analysts Smith and Enderle agree that no competitor has such an all-encompassing plan as Microsoft.

  Enderle believes that could create another threat -- Microsoft may be vulnerable to another antitrust investigation if the company is able to enjoy such success that it creates a veritable monopoly for Internet services.

  "The only thing that really stops .NET is the government," he said.
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