October 26, 2005 4:00 AM PDT
Microsoft checks out the iPod way
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outsourced their corporate e-mail, only one person raised a hand. But when asked how many believed e-mail was a core of the company's business as opposed to a generic tool, no hands went up.
"I just wanted to make sure we were as dysfunctional as I (thought)," said Moore, a venture partner at Mohr, Davidow Partners and a co-executive producer of the Vortex event.
Asked whether Microsoft was going to be in the business of providing these services on its own or through partners, Ozzie said: "I think it's going to be a mix." The more industry-specific the customization needed, the more likely it is that Microsoft would rely on partners as intermediaries, he said.
He also drew a distinction between a subscription business model and the Internet delivery of technology. Both are often lumped together as "services," but the two need not always be tied, he said.
Microsoft already has traditional software products that can be purchased on a subscription basis through its Software Assurance program. At the same time, Ozzie said it is also possible to have software delivered on a subscription basis, but in which the payment is more "chunky" than the traditional notion of a steady monthly or yearly fee.
Cheap and plentiful bandwidth has made it possible for businesses to get their software over the Internet, but Ozzie said that enterprises will still have to pay for their software in some way, regardless of how it is delivered.
"On the consumer side, there really is a question--or even small business--as to whether there is a different business model that might be emerging that is based on ad-funded software...I don't think that maybe has as much enterprise relevance," he said.
While much of Microsoft's current know-how is based on the MSN unit's experience, Ozzie said part of his role is making sure that the whole company learns those lessons. And while MSN has primarily been a consumer effort, Ozzie said there is clearly a role for similar services for small businesses.
In every area, he said, the shift will take time.
"This is going to be a many, many-year process," Ozzie said. "We're very early in terms of how services can ultimately impact all of these different markets."
One thing that is clear is that Ozzie's new role is keeping him pretty far away from his old role as head of Groove Networks' operations near Boston. After Microsoft bought Groove earlier this year, Ozzie was originally supposed to split his time between there and Microsoft headquarters, but he said he is spending a lot more time in Redmond.
"It's been as close to full time as you can get," he said.
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