Wasting no time in reacting to Microsoft's wide-ranging plan to turn its software into Web-based services, industry officials Thursday said the announcement was hardly a lightning bolt of brilliance but rather an admission of where the market is headed. "It's not a breakthrough," said Steve Mills, general manager of IBM's software group solutions and strategies. "This is not some new vision of computing they uniquely thought up. It's in response to what customers want." "What they're doing is in response to changes happening in the marketplace that many vendors, IBM included, have been taking advantage of and that they've been left out of," Mills continued. "The model for deploying IT systems has changed, and the Internet is the primary driver of that. Companies these days are not doing what they were doing in the late '80s and early '90s." However, Microsoft's new attention to interoperability is a huge shift in direction from its previous advocacy that customers use only Windows, Mills said. "For a long time, Microsoft refused to admit they had competition that had any kind of staying power," he said. Adeel Ali, senior development manager for Web site architecture at uBid.com, believes the infrastructure is getting to the point where it can handle Web-based services. "More and more, this service-type model will catch on, especially for casual users," Ali said, adding that it may hold particular appeal for small businesses unable to afford a full-time IT manager. "Generally, I do feel there is excitement (about Microsoft's strategy). Although what Microsoft is doing is not new per se, it definitely lends much more credibility to these types of initiatives," he said. Smaller companies already in the Web services business are viewing Microsoft's announcement not so much as a threat as a validation of their business model. "Other people have gone there first, but it is significant that the world's largest seller of software products has come out and defined its entire organisation around the Web," said Jack Serfass, co-founder and co-chairman of Bowstreet.com a vendor-neutral clearinghouse for Web services. "It's pretty significant that a company that derives almost all its revenue from software products would (say) in the final analysis that software is a service," he said. Serfass likened Microsoft's announcement to the first inning of a game. Microsoft.Net also "shows the client/server approach has not worked on the Internet and we're moving into the next phase of computing, which is Web services," he said. "Everyone recognises the world is heading to a great degree to applications being delivered over wire," said Bernie Thompson, president of VistaSource, a software company whose Java office suite is in beta right now. Thompson viewed Microsoft's grand unveiling as an attempt to freeze the market and give the company a chance to catch up. "As much as the antitrust case has opened people's minds, they certainly still do have a lot of mind share and ability to freeze a lot of the market as they have in the past with pre-announcements," Thompson said. "They are late in the game and have some catching up to do." Industry officials said Microsoft is likely to have a tough road ahead in making the transition and pursuing interoperability, first because the software giant is late to the game and second because its system wasn't designed for cross-platform interoperability and will need a lot of adaptation. VistaSource's Thompson believes Microsoft will have trouble taking the next step because it represents such a fundamental change in the company's business model. "Windows today and Office today rely on purchasing applications in an upgrade model, which generates a certain amount of revenue," Thompson said. "It's a long road ahead." IBM's Mills thinks Microsoft will keep one foot firmly planted in its proprietary world as the company dips its toes into more open architecture. "As always, the proof will be in the doing, not in the announcing," Mills said. When questioned about the plans for the break-up of Microsoft, Steve Ballmer said that it would be "a fair characterisation" to say that there'd been no preparation for the split. Which means that when it comes, Rupert Goodwins reckons .NET won't work and Microsoft will be culpably unprepared to survive. Go to AnchorDesk UK for the news comment. What do you think? Tell the Mailroom. And read what others have said.