Observations on Microsoft's .NET Strategy and Successful E-Tailers

I received some interesting feedback about my .NET story last week— thanks for writing. Between those email messages and my recent interview with author Brian Livingston, I now have a theory about why Microsoft would skip over Windows 2000 to promote .NET instead. Brian was making the rounds to promote his new book, "Windows Me Secrets," but he also wanted to discuss Microsoft's bundling of Windows Media Player 7 and Windows Movie Maker into Windows Millennium Edition (Windows Me). This topic has been on my mind as well, and it's something I've brought up here in the past: How can Microsoft, which was found guilty of product-tying with Windows and Internet Explorer (IE), release a new version of Windows that includes movie- and audio-editing software?

According to Livingston, the problem isn't that these products are free or even that they're supplied on the CD-ROM with Windows. The problem is that Microsoft provides no way for users to not install these products in the first place—or to uninstall them if desired. IE has been "tied" in the same way. If Microsoft had simply made IE the application it should be and not some hydra of technical hooks into the OS, the company wouldn't be facing the antitrust problems it faces today. And, of course, we'd all have a more reliable OS as well.

Brian and I discussed all the excuses Microsoft might make to explain this decision, as well as various ways that users can circumvent the problem. But he made an interesting point: that Microsoft had released Windows Me in a bid to define the feature set of Windows going forward, just in case the Supreme Court does rule that the company should be broken up. "It would be very hard to recall a product such as Windows Me, so I think that Microsoft executives are taking this calculated risk," Brian said. "No one at Microsoft would ever go on record to say this, but the company is essentially releasing Windows Me to get a foot in the door, forcing users to use its software going forward." In other words, the Supreme Court would be unlikely to rule to split up any technology already present in Windows. If a technology is included now, as in the case of Windows Me, Microsoft has leeway to include and improve its features in the future.

With .NET, Microsoft might be using the same strategy. .NET won't be fully functional until 2002 to 2003, according to Steve Ballmer. However, if Microsoft can get a preliminary version into Windows.NET sometime next year, the company is good to go in the event of a breakup. Microsoft could keep improving its .NET technologies because they would already be part of the OS. Why else promote this future technology in spite of its current OS?

Anyway, it's just a theory. If you're interested in the complete Brian Livingston interview, please visit the SuperSite for Windows.

Over the summer, I wrote about my embrace of digital media. I've converted my CD collection to MP3 files, purchased a digital camera, and, recently, gotten a Belkin video device that transfers home movies onto the computer from an analog 8mm camcorder. The process has gone well for the most part, but it has been expensive. Digital media is the future, no doubt about it, but you really do need to have the latest technology to make it happen today. And one thing I've learned in the process is that online retailers are not all created equal.

I spend a lot of money at sites such as Amazon.com, Dell.com, and Buy.com, and the sites are a study in contrasts. Amazon.com makes life very easy, and the company often has the best price—or a price that's close enough to the best to make shopping there worthwhile. Amazon's patented "1-Click" system lets me buy items with, yes, one click of the mouse, using predefined shipping and credit card preferences. It's good for Amazon, and it's good for Amazon's customers. (It's not so good for Amazon's competitors, such as Barnesandnoble.com, which was sued after trying to create a similar feature.) Regardless, Amazon.com makes things easy, and I appreciate that. Ditto for Dell Computer's Dell.com, which offers an amazing progress page for customers who want to know when their new system is going to arrive. When you spend a lot of money, you want to know what's going on, and any company getting into e-commerce should study Dell's site.

I wish I could say the same thing for Buy.com. The site offers a similar shipping progress page, but it's always out of date. When I bought the digital camera last month, I wanted it in time for a trip to Israel. The progress page was never updated, and the camera just arrived one day without advance notice. I was happy to get it, but the progress page didn't change until the day the camera arrived, which is too little information, too late. I need better feedback than that. On the other hand, Buy.com has good prices, and that's why I still shop there when I need peripherals. But sites such as Amazon.com and Dell.com will have much better customer retention than Buy.com, unless something changes. And when the inevitable e-tailer consolidations begin, retention will be the e-tailers' most valuable asset.

If you've had any interesting experiences—good or bad—with the so-called e-tailers, I'd like to hear about them. The upcoming holiday season could be a watershed event for people who want to steer clear of the malls during this busy time.

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