.NET Hosted Services

The final element of the .NET initiative is a set of service offerings built to run on top of the .NET platform. Microsoft plans to host .NET services and sell them to developers, consumers, and small businesses—and perhaps eventually to other types of customers, such as large enterprises.

It’s not surprising that Microsoft will implement its own applications based on the vision and platform it has created. The company has done this several times in the past, first with MS-DOS, then with applications (such as Office) that took advantage of the Windows GUI, and most recently with server applications (such as the components of BackOffice) that run on Windows NT and integrate well with Windows desktops. In doing this, the company made an important discovery: selling applications is more lucrative than selling the underlying operating systems.

Once again, the company hopes to capitalize on its latest platform by building and selling applications—in this case, hosted services—that run on it. And, once again, this presents both opportunities and threats to other companies: those that fill a niche that Microsoft has not adequately addressed may become the next SAP or Symantec; those who choose to compete directly may wind up alongside WordPerfect and Netscape.