September 14, 2003 9:00 PM PDT

Microsoft launches into Web conferencing

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Microsoft will unveil its Web conferencing service on Monday, the latest step in its plan to transform Office from a product suite to a concept.

The service, called Live Meeting, is based on technology the Redmond, Wash., software maker obtained when it acquired PlaceWare in early 2002. Live Meeting, like similar services on the market, is largely designed to enhance conference calls with Web content.

Participants log into a central Web site, where they can then concurrently view a presentation, exchange notes or ask questions through chat software, and collaboratively edit documents. A number of companies use it for remote training seminars.

"You want to simulate everything that happens in a meeting," said Jennifer Callison, director of marketing for Microsoft's real-time collaboration business unit. "You just need a browser and an Internet connection and a phone."

Live Meeting, an essential part of Office, marks a change in the overall sweep of the product suite. For years, Office has been synonymous with the bundle of desktop applications such as Word or PowerPoint that comes with corporate computers.

In the future, Office will encompass a broader collection of applications and services. With Live Meeting, for instance, customers don't download any new software, and no extra software is included in the desktop suite. All the software needed to conduct Web conferences--except for a standard browser--will remain on Microsoft servers.

Rather than purchase licenses, customers buy subscriptions to a service, a first for Office. While Live Meeting is the first Office service, it won't be the last.

"While this fits as part of the Office system, it is not in Office the suite," Callison said. "Live Meeting won't be the only component not integrated into an Office desktop."

Additionally, Microsoft is overhauling the Office suite with new capabilities and applications. The new version comes out Oct. 21.

Price war
Demand for Web conferencing has grown with tightening restrictions on travel budgets, but competitors are already cutting prices to undercut each other.

Web conferencing services and software will likely come to $638 million in 2003, but rise to $2.2 billion by 2008, according to statistics from analysts compiled by Microsoft. Approximately two-thirds of the revenue goes to service providers of some sort. "The market is dominated by hosted service," Callison said. At the time of the acquisition, PlaceWare was experiencing a revenue run rate (revenue at a given point in time extrapolated to an annual estimate) of $50 million.

Live Meeting also dovetails with the plans of Microsoft, Intel and various PC makers to absorb traditional telecommunications functions into computers. Companies have been talking about convergence for years, but the move finally seems to be gaining momentum through Voice over IP networks and the inexorable pull of Moore's Law, which dictates that the number of transistors on a chip doubles every two years.

The goal of Microsoft's real-time collaboration business unit, which oversees Live Meeting and Windows Messenger, is to facilitate this process.

"We're attempting to divorce communications from the device," Callison said.

Among other activities, Microsoft and Hewlett-Packard are working on a prototype PC, called Athens, through which a PC manages phone calls, video conferencing and other messaging services.

Although Microsoft largely acquired the base technology for Live Meeting from PlaceWare, it has enhanced the service, Callison said. In the new service, for instance, subscribers can sustain up to 250,000 simultaneous subscriptions. That allows them to have one massive video conference with 250,000 PCs tuned in, or 1,000 different conferences with 250 participants each.

The interface also was changed to make it look more like Windows.

 

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