Microsoft Plans Reorganization to Focus On the Net

Microsoft is working on a major shuffle of
its operations to allow it to focus more on Internet strategies and
business, news reports said.

Today's Wall Street Journal (WSJ) notes that the shuffle will be the
software giant's third in 18 months, but will create a new division
to oversee the Microsoft.NET initiative, which was announced in June.

The WSJ said that the restructuring was announced to Microsoft
staffers in a company-wide e-mail on Aug. 9, in which Steve Ballmer,
the firm's CEO, said that just as the Windows platform has powered
the growth of the PC industry over the past 20 years, the firm is now
well-positioned to create software and services that will power
tomorrow's Internet and take advantage of significant opportunities
in wireless, new devices, small business, games and TV.

Although Microsoft UK & Europe is making a firm no comment on the WSJ
article, sources said that the software giant's application service
provider (ASP) project, which has been on extensive trial since the
beginning of the year, has been a success.

The ASP project, which revolves around offering Microsoft
applications "for rent" across the Internet, running on remote
servers, has been launched on both sides of the Atlantic by a number
of ASPs.

Originally announced in February under the Applications2GO banner
(http://www.applications2go.com ), Microsoft has been working with
Compaq and Esoft Global on the rentware initiative.

Currently, Microsoft said, many organizations purchase a license for
their software, which they then install on a group of machines within
their offices.

In the future, the software giant predicts, organizations will move
to a software rental model, paying a set amount of money for rental
and support of a package on a per-user, per-month basis.

Under Applications2GO, rentware can be installed on either a LAN or
WAN basis, embracing the Internet where possible, with organizations
electing to run their applications on a remote server - hosted by a
third-party company - using Internet slave terminals on user's desks.

Microsoft has been experimenting with this concept for Internet
access to Windows 2000 applications on its Web site, but the plan
with Compaq and Esoft goes much further, moving all three partners
firmly into the ASP marketplace.

The consortium said that at the heart of the Applications2GO strategy
is the ASP model, which the companies define as the concept of
delivering application software over the Internet as a service rather
than as a product.

The companies said that for customers of business software, ASP will
bring about two major changes: firstly, in the way applications are
deployed and supported, and, secondly, in the way software is
financed.

Typically, for example, applications will be charged on a price per
user per month basis - effectively a rental payment.

The benefits to businesses include guaranteed service level
agreements (SLAs), improved cash-flow through reduced capital outlay,
reduced time-to-application benefits and application plus software
upgrade flexibility.

The Applications2GO companies said that as the ASP market evolves,
RentWare will make it possible for large and small organizations
alike to deploy low volumes of sophisticated applications that would
previously have been unobtainable due to the high initial outlay and
software license costs.

Against this backdrop, the firms said, software developers will see
an increase in the size of their potential customer base.

Compaq's plan is to offer its hardware for the RentWare services to
run on, while Microsoft is planning to diversify away from its
traditional operating system and license-based applications software
base over to the RentWare platform.

Esoft Global, meanwhile, is billed as Europe's first Internet ASP
and, as such, will act as the "glue" to hold the services together.

Microsoft's Web site is at http://www.microsoft.com.

Reported by Newsbytes.com, http://www.newsbytes.com.