One of Microsoft's goals in the year 2001 will be to prove it hasn't lost its old development magic. And one of the main ways the company plans to demonstrate that is to build a subscription service so compelling that the "Net generation" can't live without it. Welcome to Microsoft's stealth service, known as Netdocs. Netdocs is slated to be one of Microsoft's showcase .Net building blocks, but Microsoft officials steadfastly refuse to discuss it publicly. .Net is Microsoft's shorthand for its corporatewide strategy to deliver software as a service. According to its .Net road map, applications and pieces of applications soon will be delivered as "services" that can be rented over the Internet. Microsoft officials would not comment on when Netdocs will debut. The service is not yet thought to be in alpha or beta testing, however. According to sources, Netdocs is a single, integrated application that will include a full suite of functions, including email, personal information management, document-authoring tools, digital-media management, and instant messaging. Microsoft will make Netdocs available only as a hosted service over the Internet, not as a shrink-wrapped application or software that's preloaded on the PC. Netdocs will feature a new user interface that looks nothing like Internet Explorer or Windows Explorer. Instead, Netdocs will deliver an integrated workspace based on the Extensible Markup Language (XML), where all of its application modules are available simultaneously. This interface is based on .Net technology that Microsoft, in the past, has referred as "Universal Canvas". Some people inside Microsoft describe Netdocs as a ".Net application/service for knowledge workers". Others call it a next-generation productivity suite being designed for individuals to share personal information and collaborate via teams. Whether Netdocs users are individuals, small businesses, corporate customers, or all of the above, Netdocs could change the way Microsoft customers handle many tasks, ranging from signing up for their online services, to building configurable home pages, to managing their own .Net billing, support, and administrative services. "If you think of what a hosted version of Microsoft Office would look like, if it worked properly, you'd have Netdocs," said one anonymous source claiming familiarity with Microsoft's Netdocs plans. Netdocs, like a number of current and pending Microsoft offerings, is a product of the Microsoft competitive culture, whereby different teams are encouraged to work on competing projects. The project favored by Microsoft's top brass ultimately is christened the winner. The battle between the Netdocs and Office teams has been one of the fiercer ones, according to sources close to the company. The matchup has pitted Microsoft senior vice president of Office Steven Sinofsky and his troops against senior vice president of subscription services Brian MacDonald and his forces. In many ways, the Netdocs-Office face-off epitomises the challenges Microsoft, as a company, is facing as it attempts to move from being a vendor of packaged PC software to a vendor of software services delivered over the Web. While some within the company continue to bank on the future of shrink-wrapped applications, others believe hosted applications, "rented" via a subscription licensing model, are poised to take over the world sooner, rather than later. Currently, say insiders, the Netdocs and Office development teams are working in parallel. It's unclear if the two products ultimately will be positioned as two different .Net offerings or if Netdocs will emerge as the Microsoft .Net desktop of the future. Take me to ZDNet Enterprise Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.