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January 1, 2003

The Dozen 2003

Microsoft Corp.

Redmond, Wash.

Stagnation is Microsoft's worst nightmare. Letting dust collect on toolbars, ignoring entreaties to upgrade core productivity tools, and generally choosing to live with the status quo: These behaviors won't keep the home fires burning through the damp, dark Redmond winter. Such stillness invites the specter of Linux — of an open source poison that seeps into the vacuum and loosens the company's grip on the future. Even in the worst of times, Microsoft must find ways to stoke demand and lead its immense installed base to do the right thing: Upgrade.

Microsoft has always been exceptionally quick to notice when stagnation, bloat, and a false sense of security have set in with competitors. The company's splashy October introduction of MSN 8 served notice on its next victim: AOL Time Warner, the dominant consumer Web gateway that spent 2002 shooting itself in the foot. After a few years of youthful floundering, MSN has a calling. It's the user instantiation of what was the ephemeral concept of .Net Web services. Most importantly, it's a software product — and selling products is in Microsoft's DNA.

Microsoft is ready to change the Web game to its advantage — and in so doing, build the critical mass that will finally accelerate Web services software development. Again, Microsoft is merely drawing on its DNA, in the same way that it stoked the PC fires with DOS and Windows in the days of yore. This time, the company is betting that the primordial age of online advertising and free content is about to give way to e-business and its irreducible currency: transactions.

XML: The Elixir

The current state of e-business affairs represents a classic Microsoft opportunity. And what's happening with XML is a familiar tale: Microsoft has once again fallen in love with an emerging open standard and is moving faster than its competitors to offer the de facto implementation. Coupled with other Web services standards, XML could do for transactions what the emergence of remote procedure calls, electronic data interchange, and SQL (ODBC) did for an earlier age. The biggest challenge is to make it all work over the asynchronous, loosely coupled structure of the Internet.

XML has given Microsoft the common blood to perform the next great unification of its technology portfolio, including SQL Server and its Analysis Services. Visual Studio .Net was the company's key release of the year; this massive software development product embodied the .Net Web services vision. The .Net push is also bringing focus to the company's aggressive move into midmarket enterprise applications with Great Plains, Axapta, and Navision.

Microsoft's infrastructure will sprout reasons for customers to upgrade — and keep the green stuff flowing into Redmond.

MAJOR MOVES IN 2002

· Released Visual Studio .Net

· Acquired Navision A/S; upgraded Microsoft Project Management

· Created technology and marketing partnership with Siebel Systems

INTELLIGENT ENTERPRISES

· The Madrid Stock Exchange created an Internet·based automated trade processing system using SQL Server and Windows 2000 Datacenter Server

· LifeMinders uses SQL Server to run its large data warehouse, supporting massive personalized marketing efforts







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