.Net: the making or breaking of Microsoft?

Microsoft has been making a lot of noise about its web services strategy, .Net. But is it really staking its future on it? Kate Hanaghan investigates...

Post dot-com bubble economy, post the first few years of web hype and growth, IT vendors are looking at the next big thing to carry them forward. There are few vendors and few trends as high profile as Microsoft and web services. Put the two together and we arrive at .Net.

The Redmond giant is putting its full marketing clout behind .Net, as demonstrated by its evening TV commercials currently running in the UK. Web services before the watershed? Sounds preposterous but it's true. But is there anything different about this campaign? Is it really betting more on .Net than anything that has come before it?

Certainly Microsoft would have us believe .Net is absolutely critical to its future. Or as Peter Bell, the man responsible for the business strategy of the .Net developer group in the UK, puts it: ".Net is nothing more and nothing less than the next generation of Microsoft technology."

Analysts, other industry watchers and even vendors admit it will be some time - as long as 10 years - before the dream of fully integrated web services is realised. In other words, it will be some time before applications and systems work together seamlessly, between organisations, providing all manner of services.

Martin Butler, founder and research chair at Butler Group, said: "The ultimate web services dream is software truly delivered as a service. But in truth, not a lot of people are doing anything - the vendors are setting their stalls out and nobody knows exactly what web services are going to turn into."

Take a look at what Sun has achieved so far. Adrian Keward, who heads the pre-sales team for Sun One in the UK, explains its web services customers so far are wireless operators running "simple systems in labs" and other early adopters who "want to see if it works". He said: "'Experimental' would describe a lot of the market."

But Microsoft would challenge this claim. It says it already has customers, such as Tesco.com, who are forging ahead with web services projects - although it readily admits the full potential of web services won't be realised for several years.

Sun's Keward also contends that any money Microsoft claims to be making through .Net can be attributed to related sales of Visual Basic or Office, for instance, rather than fully blown web services. He blames Microsoft for fuelling the hype around web services and for not caring about the ramifications. "Microsoft's not worried about annoying people," he added.

So why is Microsoft investing heavily in marketing .Net so early on? Indeed, there are end users who think Microsoft is doing nothing more than using smoke and mirrors, that the reality is far from the dream it's currently pedalling.

Ian Bramley is an industry watcher with a special interest in Microsoft. His explanation is that Microsoft's hype is its attempt to assume a "market leadership posture". In other words: "It's trying to move the game on" - which is commercially understandable, though doubts over when mindshare delivers revenue must exist.

But Bramley also sees the .Net strategy as Microsoft proving its visionary prowess. He said: "Microsoft is sensitive to the fact that in the last four to five years it's been weak in architecture and vision. .Net is their visionary strategy."

He contrasts the position with IBM's highly successful ebusiness positioning. Also note Bill Gates' move to chief software architect and the corresponding rise of web services, at least as a concept.

Through its marketing machinery Microsoft has created a snappy brand to encompass a collection of technologies. Now it wants to prove this is at the hub of everything it does.

But Sun's Keward isn't convinced .Net is as critical as Microsoft would have us believe. He says Gates wants to promote the idea that the whole company is behind .Net, but despite this thinks that it won't be calamitous for Microsoft if .Net proves to be a comparitive failure.

He added: "It will re-align itself to make money out of subscription-based services with Office, for instance."

Alan Lawson, analyst at Butler Group, agreed: "They are totally committed to .Net now but they were also totally committed to Windows DNA a few years back. They try something once and if it doesn't work they try something else."

But amongst all the scepticism, could .Net also represent something very positive about the way Microsoft operates? Lawson added: "It seems to be completely genuine with its approach to standards. This is a different Microsoft. It realises if you've not got this, it won't work, full stop."

Rick Berquist, PeopleSoft CTO, agrees that Microsoft could become a different, more open kind of power with .Net. "It is recognition from Microsoft that integration is a bigger pie," he said. "It is absolutely important for Microsoft. Customers can now choose from two camps [.Net and Java] - it's a huge step forward for customers."

While .Net might not end up the be all and end all for Microsoft, one thing's for sure: the web has entered a new era and the pressure is now on some of the biggest IT companies - and especially Microsoft - to justify their current jostling and investment. This can't be a case of repeating the hot air that surrounded phenomena such as dot-coms and 3G. Can it?