Microsoft shifting strategy to connecting a post-PC world
Copyright © 2000 Nando Media
Copyright © 2000 Associated Press
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By MICHAEL J. MARTINEZ
REDMOND, Wash. (January 9, 2000 5:37 p.m. EST nandotimes.com) - Microsoft chairman Bill Gates wants
to send you an e-mail to let you know when your laundry's done - or, for that matter, when your stock is sold, your
cat needs to see the vet again or your dishwasher needs repairs.
And he wants to send you that e-mail wherever you happen to be at the time on whatever device is handy,
whether that's your personal computer, handheld organizer, cell phone or perhaps even your toaster oven.
This interconnected world is at the heart of a new strategy at Microsoft Corp. - one that doesn't rely on the PC
software that made Microsoft the most valuable company on the planet.
"I wouldn't say that the PC is dead," said Craig Mundie, Microsoft's senior vice-president in charge of consumer
strategy. "People have been saying that for years. But I think it's safe to say that people are going to start
looking for new ways to access and keep their data in addition to, or in ways that complement, the PC."
Microsoft's new strategy, called "PC-plus" by company insiders, is just making its public debut, but actually it's
more than a year in the making. It has three main areas: giving everyday devices computing power, providing
the software to allow those devices to communicate, and investing heavily to help build wireless and high-speed
Internet access throughout the world to link it all together.
Microsoft envisions a home where everyday appliances and electronics are "smart." Microsoft executives talk
about VCRs that can be programmed via e-mail, clothes washers that send an instant message to the home
computer when the load is done and refrigerators that will send an e-mail when there's no more milk.
To do that, Microsoft had to do two things: give electronics and appliances "brains," and give them the means
to talk to each other.
The first part will be accomplished by a new version of its Windows CE operating system. Windows CE was a
favorite target of critics, who have said it attempts to do too much and uses too much processor time, memory
and battery power. Microsoft has nearly rewritten the entire program, making it less memory intensive and
relying more on basic functions.
Windows CE is already used in cable set-top boxes and will be the vehicle for other devices and services.
Already, Microsoft has TV set-top boxes and prototypes of new "Pocket PC" handhelds and "Web companion"
Internet-only terminals.
Getting these devices connected to each other, and to the Internet, will be done through the Microsoft Network.
Launched in 1995 as a competitor to America Online, MSN has been a commercial and critical flop. While AOL
has 20 million members and counting, MSN has only about 3 million subscribers.
Last October, veteran Microsoft executive Brad Chase took over MSN and shook things up. The Sidewalk.com
city guides were sold off, other information sites were shut down, and Chase started focusing on Internet
services such as e-mail, shopping, password storage and instant messaging.
"Software, whether it's on a CD or on the Internet, is something Microsoft knows how to do well," Chase said.
"Getting these kind of services onto computers, handhelds, cell phones, anywhere - that's the kind of thing that
we're good at."
The newest version of MSN for cellular phones, for example, links those phones to MSN's Hotmail, allowing a
user to have a single e-mail address for his or her PC, Web companion, cell phone and WebTV box.
No other company has offered such an easy solution for ubiquitous computing over such a range of devices,
Chase said, and that's where Microsoft's strength will become apparent. MSN and the Internet will be the
common language used by any device to talk with any other device.
"It's a pretty strong idea," said Rob Enderle, computer analyst with the Giga Information Group. "If Microsoft
simply uses the Internet, it's easier for the electronics manufacturers to use, and cheaper, too."
Gates' keynote speech at the 2000 International Consumer Electronics Show in Las Vegas was the company's
first major effort to tie these initiatives together. He discussed new handheld devices, cell phone software and
e-books, but also talked about integrating the entire home with the Internet. His speech, and Microsoft's demo
booth, were the talk of the show.
Microsoft has also taken a heavy financial interest in the "pipes" of the Internet, investing over $8 billion in the
last 13 months to ensure that it will have a channel to deliver enhanced products in the future. The biggest such
investment was a $5 billion stake in AT&T, in return for a guarantee that Windows CE would be used in 10
million AT&T set-top boxes.
Since AT&T also owns a large portion of the nation's cable TV infrastructure, Microsoft may also find itself with
a strong delivery channel for its software down the road. The company has also invested in wireless
communications, cellular phones, digital subscriber lines, and telephone companies from Japan to Europe to
Brazil.
"We believed we needed to help build a faster communications infrastructure," Mundie said. "We're neutral to
the type of network, as long as we can deliver our services to the consumer. We want to sell software, and this
helps us do that."
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