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Last Updated: Friday, 23 September 2005, 12:38 GMT 13:38 UK
Net's biggest changes loom large
By Mark Ward
Technology Correspondent, BBC News website

Bill Gates, AP
The firm Bill Gates founded faces stiff competition
On 23 September Microsoft celebrates its 30th anniversary and as it does so it faces greater challenges than at almost any time in its history.

This is all thanks to the internet and the novel uses that consumers and businesses are finding for it.

Although the net became the fulcrum of

the technology world little more than a decade ago, ironically just as Microsoft's dominance of the desktop was assured, only now is the true impact of what the net makes possible becoming apparent.

The changes also make sense of Google's launch of a wi-fi service, AOL's unveiling of a net phone service, Oracle's purchase of Siebel as well as Microsoft's most recent re-organisation.

Hi-tech on tap

One of the main changes the net ushers in is in the way that businesses use software to keep themselves humming.

Many companies no longer spend months and perhaps millions of pounds writing, testing and deploying their own programs.

Instead they sign on with outfits such as Salesforce.com and get their software as a service - just like they do with net access, power or water.

In return for subscription fees, Salesforce.com acts as host and developer of the software.

This makes it much easier to roll out updates and improvements, said Chris Boorman, European marketing head for Salesforce.com.

New versions of a program do not have to be laboriously installed on every machine in a company network. As long as users can get to a web browser they use the latest version.

When users no longer have to worry about keeping a program running and up-to-date, they are much freer to think about customising it to serve their business better, said Mr Boorman.

Google logo, Getty Images
Google is challenging Microsoft for dominance
A reliable net infrastructure is the key to making software-as-a-service possible. And this reliability is also behind the big change the net is making to the lives of consumers too.

Searching has become synonymous with using the net. But, says Tony Macklin, vice-president of European product management at Ask Jeeves UK, search is starting to become more than a way to get around the net.

Evidence for this can be found in the desktop toolbars that search sites such as Google, Ask Jeeves, Yahoo and many others are producing.

Now, said Mr Macklin, users are turning to search tools to browse through their life; to find their pictures, music, documents and e-mails wherever they are.

"The simplicity of the search box is going to become more important to the way that people access information," said Mr Macklin.

This explains why net firms such as Microsoft, AOL and Google are buying other firms so they can offer more, such as net phone services, to users. They want to turn those toolbars into the digital helper that can do almost anything and be accessed any and everywhere and at any time.

Wireless world

At the moment though, getting access everywhere is a problem. Few people have phones powerful enough or use mobile networks fast enough to get at their stuff no matter where they find themselves.

Also wireless, or wi-fi, services are still in isolated hotspots and it is by no means simple to hop from one to the other and keep connected to the net.

Plug, Eyewire
Software is starting to become a utility like electricity
But, said Philippe Courtot, chief executive of security-as-a-service firm Qualys, ubiquitous wireless access to the net is on the way.

This could explain rumours about Google's own-brand wi-fi service that some say is close to launch.

When ubiquitous wireless access arrives, he said, it will make it possible to offer all software as a service. No longer do you have to carry around a laptop with the program installed; you just get at it via the web.

"You could do everything yourself before now but the cost was prohibitive," he said, "ubiquitous access allows you to move data to anybody at almost no cost."

"Also," he said, "the rules of competition change because the barriers to entry are so much lower."

"You cannot keep extracting money out of your customers if you do not give them more."

This means that software firms have to work hard to keep customers happy or they will move elsewhere, perhaps overnight.

With your software supplier sitting at the end of a wire it is easy to change them if you are not happy with the service they give you, said Mr Courtot.

This stands in stark contrast to the situation now, he said, in which customer support is seen as a cost by the software giants of the world such as Oracle and Microsoft.

As a result, the spoils no longer go to the biggest players. In the recent past, Mr Courtot said, the biggest company in a market has survived by protecting its position rather than innovating or doing a better job for customers.

The net, he said, utterly removes that protection. A sobering thought for Microsoft as it turns 30.

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