Steve Ballmer, Microsoft president, yesterday outlined his total commitment to turn his company into an online software service provider within five to seven years.
Ballmer told the audience at the Gartner Group conference in Orlando that the change in business model would be part of a massive shift by the software industry to application service providing (ASP) online.
"There will be no one left in the software business whose applications haven't transformed into a service," he said.
He said he dreamed of the day when Microsoft would be able to offer a "knowledge worker service" that had real-time interactivity with the customer, providing the storage, functionality and information they needed online without much user intervention.
He said there would be three types of ASP. The first was those that offered facilities for the customer to host their applications on. The second would be somebody who writes an application that lives as a service. By that definition every ISV will be an ISP within 10 years, he said.
The third type of ASP would offer a variety of software integrated from two or three vendors.
"We want to provide the platform for category one and three ASPs and we need to support category two ASPs and yes we will be a category two ASP ourselves for products like Exchange and Office," he said.
"If somebody wants to buy the knowledge worker service we may have partners who can resell and add value. So I don't rule out the role of partners, but we need to be an ASP ourselves, as I would argue does every other software company need to be an ASP in that category two context," he said.
A panel of IT directors and analysts told Ballmer that Microsoft was unfriendly, did not innovate and gave customers no indication of the direction it was heading. They also said Microsoft failed to meet customer needs on software improvements and licensing.
"Your customers are tired of hearing that the answer to their problem is the next upgrade," said interviewer Michael Gartenberg, Gartner research director.
Ballmer said a move to a software services model was the only real answer to that problem.
"The answer to all problems from all software vendors is add some more software. The fundamental problem is that there isn't an infrastructure that lets us stream out new bits and patches," he said.
By becoming an ASP or platform provider to ASPs, he said, would mean there was an infrastructure that allowed software to be updated easily without constant version changes for the end user.
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