An interesting article on the potential demise of .NET.
IS .NET ON THE WAY OUT?
The .NET initiative began with the "Internet Tidal Wave"
memo Bill Gates sent to Microsoft employees in 1995. Gates could sense
that the computing industry was changing rapidly because of the
Internet, and he charged the troops with adapting to this change.
Microsoft would meld Internet capabilities into all its products,
Gates said, and during the next several years, the company did just
that. Microsoft eventually decided it would need to redesign its
entire product line to embrace the standards-based technologies that
would underlie Next Generation Web Service (NGWS), later (and wisely)
renamed .NET.
The goal for the company was to transition to a subscription software
model, similar to cable TV subscription services. One of the problems
with Microsoft's sales models is that the company has peaks in its
earnings reports that are tied to big product introductions, and
valleys that occur when existing products have matured or the company
has replaced them with lackluster revisions. To smooth its earnings
curve, Microsoft embarked on a controversial (but, at the time, legal)
decade-long earnings restatement project, in which the company put
aside portions of its earnings in each peak quarter and applied the
difference to quarters in which the company didn't perform as well.
The result was an unnaturally smooth earnings growth curve, in which
the company experienced double-digit growth, year over year,
throughout the 1990s. Unfortunately for Microsoft, earnings reporting
laws changed. Federal regulators began to examine the company's books,
and Microsoft had to change the way it reported earnings.
Although the company knew it couldn't maintain its historical growth
rate, it was still eyeing ways in which it could smooth out revenues
and avoid the bizarre daily stock-price changes that affect most
high-tech companies. One obvious way, of course, was to move to the
subscription software model it had so long desired. Instead of
customers purchasing Microsoft Office once every 3 years for $400, for
example, perhaps the company could convince customers to subscribe to
an Office service for $100 a year. Like a gigantic aircraft carrier
turning slowly at sea, Microsoft moved to implement this plan. On the
enterprise side, software licensing had already evolved to a
subscription-like plan, so Microsoft met little resistance among its
business customers until it so egregiously changed the licensing fees
in Licensing 6.0 that customers revolted and the company finally had
to make concessions to lower the cost.
Consumers represented a different problem for Microsoft's
subscription-service scheme. Most people think that when you buy a
software product, you own it--Microsoft's obscure and
little-understood licensing terms notwithstanding. Explaining to an
individual that the software he just purchased for $100 wasn't really
his to keep and continue using proved to be a challenge that even
Microsoft's unlimited marketing budget couldn't overcome. In test
markets for subscription software--in particular, Office XP--consumers
universally panned the idea, and the complaints compelled Microsoft to
eventually provide lifetime licenses to those who had purchased a
1-year subscription fee.
Developers were another obstacle to subscription services. Although
Microsoft successfully moved all its development efforts to the new
.NET Framework and to updated programming languages such as Visual C#
and Visual Basic .NET, the company wasn't able to hide a glaring
problem: You can't easily port existing applications and services to
.NET, if at all, so the environment is good only for new development.
That scenario might be fine in the go-fast world of Internet
development and hosting, but it doesn't help developers of mature
applications, such as word processors, or businesses that aren't ready
to jump on the next big thing simply because it exists. Developers
almost universally praise the quality of the .NET Framework and
associated technologies, but then most developers also have to
maintain old code written in comparatively ancient programming
languages. They're like car enthusiasts forced to drive mid-80s Ford
Escorts to work.
Finally, Microsoft's .NET initiative marketing message was convoluted.
From Microsoft's most senior executives to the lowliest employees
(they're in marketing, by the way), the message was clear: .NET is the
future. The company changed the names even of products that had little
to do with .NET. I almost expected the company to announce a corporate
name change to Microsoft .NET. But customers were confused by this
message, particularly the part about how the best was always yet to
come. And Microsoft began backing off from the .NET branding strategy
by announcing the .NET Connected Logo program and dropping the .NET
moniker from virtually all its products. Just this week, the company
renamed its .NET Enterprise Servers to Windows Server System. I
haven't seen a retreat like that since the company touted Bob as the
future of user interfaces.
So now it's April 2003 and I'm hearing that .NET is dead--that
Microsoft will continue downplaying both the name .NET and the
technologies behind it. You can find hints all around that this ".NOT"
strategy might be happening right now. The 64-bit versions of Windows
Server 2003 (once called Windows .NET Server, by the way) contain
absolutely no .NET bits at all: No .NET Framework and no ASP .NET.
Exchange Server 2003, the company's next major messaging server,
contains no .NET. Office 2003, the premier office productivity suite,
contains XML functionality only in the high-cost business versions and
contains few native .NET features. In the biggest year ever of new
product introductions from Microsoft, few if any of its products
promote .NET, its supposed vision for the future.
Is .NET dead, or is Microsoft simply going through yet another round
of growing pains as it attempts to figure out just what, exactly, its
customers want? Frankly, I'm as confused as you probably are.
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