Microsoft Cloud OS still pie in the sky

If Microsoft's latest efforts are any indication, a web-based iteration of its desktop franchise won't be ready any time soon.

Microsoft late on Tuesday announced two new Windows Live services, one for sharing photos and the other an online storage service. The two services, both in private testing, represent the start of a new push by the software maker to make its web services more compelling. But their release also suggests that Microsoft is still at the early stages of its web services effort.

The Windows Live Folder service, in particular, is similar to many existing online storage services, such as Yahoo Briefcase and AOL's Xdrive. While storage is a key component for any web-based push, the fact the service is just now emerging — and is still not publicly available — seems to imply that Microsoft is still working on some of the basic building blocks that it would need to really replicate Windows on the internet, the so-called "Cloud OS" that some think Microsoft has up its sleeve.

It's unclear whether Microsoft's ambitions in this area stretch that far.

"I'm not entirely convinced they are going to go as far in that direction as some people are suggesting," said Matt Rosoff, an analyst at market research firm Directions on Microsoft. "I don't think it is strictly necessary."

Microsoft has talked about a strategy of software plus services in which everything on the desktop is augmented, though not replaced, by online services. Rosoff said that appears to be "Plan A" for Microsoft, though he wouldn't rule out the notion that Microsoft is developing a backup plan.

"Maybe 10 years from now... Windows becomes a shell and a bunch of drivers and most of the applications have moved online," he said. "It's possible, but I don't think Microsoft will go there until and unless they have to."

More likely, he said, is that a certain set of functions, handled on the desktop today, move online.

"Microsoft is gradually building out services that could conceivably take the place of some functions of a PC," Rosoff said.

A new generation of Windows Live
In other ways, though, Microsoft continues to bet on the desktop. Both the new Windows Live Photo Gallery, as well as its Windows Live Mail desktop email programs, represent steps in that strategy. In both cases, Microsoft has written new versions of programs that are already built into Windows Vista. In the free downloadable versions, though, the programs have a direct tie to Microsoft's online services.

The moves represent a new front for Microsoft, which first announced its Live services push in a splashy event in San Francisco in November 2005. The company rebranded Hotmail and MSN Messenger with Windows Live names and in the ensuing months rolled out a slew of new services under the Windows Live moniker.

"We introduced a whole bunch of interesting services, but not major services," said Brian Hall, the former head of Windows Live OneCare, who now serves as general manager for the Windows Live unit. Hall said that the company spent much of its time over the past months revamping its lineup of services, in particular with the overhaul of Windows Live Hotmail.

"That was kind of the end of the first generation of Windows Live," Hall said.

The next generation of services, which starts with Live Folders and the new photo gallery, is aimed at making sure Microsoft has more of the major infrastructure pieces in place and also at working to integrate the services better together. The company is testing a tool that would allow people to install multiple Windows Live services and keep them current with a common updater.

As for the prospect of a full-fledged Cloud OS, Microsoft has been largely silent. The company has said that Ray Ozzie is developing a broader Live services platform, but has offered few details. Ozzie himself has been something of a recluse in recent months, though he did speak at the Mix '07 show in April.

"I've nothing to announce in that realm at this time," Ozzie said in an interview at the show. "Yet, it's pretty clear that we're working on some stuff."

Some Microsoft watchers had been hoping to hear more about Microsoft's developer or "platform" strategy at the October professional developers' conference, but Microsoft has now cancelled that. Microsoft has opened up programming interfaces for some of its individual Windows Live services, but its broader message for coders is less clear.

"They have talked a lot about their developer strategy, but that's in its infancy," Rosoff said.

Microsoft readily admits it is just in its early stages and knows that the latest products are just a step in getting the company where it wants to be.

"We're in a good position, but we are not in a great position yet," Hall said.