InformationWeek: The Business Value of Technology

onsumers may be the initial target for Microsoft's upcoming suite of infrastructure services, but the company's plan to profit from the software includes charging software developers and network service providers as well.

These services, code-named HailStorm and scheduled for availability next year, aren't complete applications. Rather, the software aims to simplify E-business by performing common tasks, such as authenticating a user on a Web site, checking a calendar for free time, or notifying a customer when an order has arrived, in standardized ways across multiple applications and Web sites.

Microsoft plans to sell a suite of HailStorm Web services itself and license the architecture--a set of XML tags for storing data about a user's identity, computers, documents, calendar entries, and contacts, and the calls needed to pull this data--to software developers.

For example, Groove Networks Inc. recently demonstrated a version of its peer-to-peer collaboration software that uses HailStorm services to let users invite colleagues from their MSN Messenger Service buddy lists into a Groove session. Invitees would join the session from an instant-message window. It's a scenario that could make business applications more useful, without imposing additional work on developers.

According to the plan, consumers would pay for access to HailStorm services. "The future of software is subscriptions," says Microsoft chairman Bill Gates. But the plan works only if users get something new for their money, he adds. "We're not taking something that was free and putting it behind the subscription wall."

Microsoft also plans to derive some revenue by selling development tools and an online test environment to independent software vendors that want to build their own HailStorm services. Network service providers would pay annual fees to carry the software and additional charges for high-volume or demanding service-level agreements.

The key will be whether enough computer users get behind the idea to create the momentum needed to make it all work. "If you have a lot of people who sign up for HailStorm," says Kerry Gerontianos, president of Incremax Technologies Corp., an application development company in New York that works closely with Microsoft technologies, "it's going to generate demand for [Microsoft's] platforms and services."