Microsoft on Monday launched a set of software building blocks, grouped under the code name HailStorm, for its .Net software-as-a-service strategy. Along with HailStorm, Microsoft marshaled out new versions of its Web-based Hotmail e-mail service, MSN Messenger Service, and Passport authentication service. The company is positioning HailStorm as a way of enticing developers to create XML (Extensible Markup Language)-based Web services deliverable to a variety of PC and non-PC devices such as handhelds and Web appliances. With HailStorm, Microsoft is attempting to position instant messaging as a development application, rather than as a limited-purpose consumer application. The idea is to use instant messaging as the behind-the-scenes vehicle for a range of Web services such as instant stock quotes, calendar functions and Web commerce services. By using instant messaging as a core development application, HailStorm pits Microsoft against AOL -- the leader in instant messaging technology. Microsoft on Monday also disclosed five development partners for its .Net plan, including eBay, which announced its partnership last week. eBay and Microsoft entered into a strategic technology exchange that includes turning the eBay API (application programming interface) into a .Net service. In a Monday research note Merrill Lynch analyst Henry Blodget said HailStorm is important to Microsoft for two reasons. "First, it should increase the size and loyalty of Microsoft's consumer user base, which should ultimately create opportunities for Microsoft to charge users a monthly fee," he said. "Second, and more importantly, HailStorm should make the .Net platform more attractive to third-party developers," Blodget said. "These developers will be able to leverage both the HailStorm code and user base when building their own Web services--similar to how they leverage the Windows OS when building PC applications." Part of Microsoft's success with Windows has been wooing developers to create applications for the operating system, thereby increasing Windows' appeal. In transitioning to a Web-based services strategy, Microsoft must continue to attract developers for the same reasons. "Attracting developers to the .Net platform is one of Microsoft's key strategic imperatives for the next several years," Blodget said. "Doing so will help drive sales of nearly all core Microsoft products, which will be tied to .Net." But Microsoft faces multiple challenges as it seeks to shift sales away from PC-bound software applications to Web-based software and services. One trouble spot may be battling competitors, including IBM, Sun Microsystems and Hewlett-Packard, that are also hoping to attract developers. Microsoft said it plans to tap end users -- consumers and business customers -- as the primary source of revenue from HailStorm services. The move could market a dramatic shift in how Microsoft delivers Internet services, which, for the most part, have been free. The company envisions HailStorm as helping to move the Web to an end-user subscription model, where users pay to use a service. Microsoft plans to broadly support HailStorm in its applications, including Office XP, Windows XP, games and other applications. The most common use in Windows XP would be the MSN messenger service. The company also said it would integrate Windows and Passport authentication as well as use HailStorm for delivering software updates. HailStorm is based on Passport's user-authentication technology, which Microsoft uses for Hotmail, MSN Messenger and some MSN Web services. The company describes the XML-based technology as user rather than device specific. Rather than keeping information on a single device, such as a PC, Microsoft envisions people accessing content and personal information through a number of devices created using XML tools. Microsoft envisions two types of .Net services: broad horizontal building-block services such as HailStorm and application-specific services. HailStorm initially will compromise 14 software services, including MyAddress, an electronic and geographic address for an identity; MyProfile, which includes name, nickname, special dates and picture; MyContacts, an electronic address book; MyLocation, for pinpointing geographical location; MyNotifications, with will pass along updates and other information; and MyInbox, which includes items such as e-mail and voice mail. Microsoft said HailStorm will enter beta testing later this year and will be released next year. Rather than solely relying on Microsoft technology to become the standard for these services, the company is using established Web development languages such as XML, SOAP (Simple Object Access Protocol) and UDDI (Universal Description Discovery and Integration). IBM also is pushing XML, the emerging choice du jour for creating Web pages, and UDDI, a sort of Web services Yellow Pages for developers. IBM last week used XML and UDDI to beef up its WebSphere Application Server and has been aggressively using the tools to woo developers to its middleware software. For complete business coverage, see ZDNet UK's Enterprise Channel. Microsoft has a plan to get the whole technological world talking to itself. It's a grand vision of all your gadgets sharing information and getting it to you in the best way possible. Is this a dream... or a potential nightmare of privacy and security concerns? David Coursey loves the vision, but is fearful of the reality. 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