Microsoft Gives Up on Hailstorm

Dephex Twin writes "According to a NYTimes article: due to lack of 3rd-party support for Microsoft's "Persona" (originally codenamed "Hailstorm"), the company has been forced to dump the project. It seems the companies didn't like having a middleman between them and the consumers. As a person worried about the future with .NET, this is a bit of a relief."

Re:MS is running outta juice!

You can hardly cast the X-Box as half-assed. While the investment hasn't rendered the return expected yet, even Hemos says " X-Box isn't dead yet - not by a long shot. [slashdot.org] ". I know that many readers concider Hemos a beta test of human cloning, but he speaks the truth this time.

While microsoft can't turn out the growth that the company has stolen from it's costomers in the past, doesn't mean that they don't have plenty of cash on hand. In this case in paticular, they are listening to the public enough to realize that not only do we not like what they are doing, they can't force us to use it, and we will not if they don't.

I too look forward to the day when Microsoft is tamed into a shrew of a company that can't afford to die, but cant afford to do anything real in the market place. That being said, it's hard to put your hand on the pulse of Microsoft's marketing engine unless your the direct recipent of it's ploys. Trust me friend. For-Hire closed source developers like MS's spoon feeding them a soft diet of Visual-This and .NET-that. I expect these developers will adopt the new versions of Microsoft because the company they work for doesn't want to deal with retraining thier development staff.

You may think you see them tossing in the towel, but what you actually see are the threads of the towel falling into the ring as they are whipping the cornors back and forth across the backs of millions of developers

</soapbox>

Microsoft and the future

No, it's not just you. The problem seems to be that MS has tried to expand too quickly at quite an inopportune time. Their attempts at horizontal integration of the entire consumer electronics industry has backfired with the current antitrust issues going on.

And this certainly isn't the first time. We all remember when the Interent wasn't something MS was interested in. It wasn't big enough, if I remember Gates's sentiments. Instead, they were going to replace it with MSN, in one of MSN's many reincarnations. How many times did they reinvent MSN, each time diving into a new idea head on, only to find nothing there to grab on to? (Of course, this time, they're just buying out Qwest DSL, so it'll probably work just fine)

The half-assed attempt at a console, also known as the X-Box, is surely just an investment for the future home entertainment systems created by Microsoft, but at the rate they're going there will not be enough cash on hand to take the losses normally associated with selling console systems.

I'm not so sure about this. If there's one thing that we can be sure about, it's that MS is persistant to levels no other business can finance. They've launched programs and fallen on their face more times than most companies could ever hope to afford. Many would say that they've finally gotten Windows right, and it only took them 15 years.

I'm sure MS will get the X-Box right, even if it takes another 15 years, because when they do get it right, they'll have it all. Why bother with Windows on PC's when they can put everything; game console, DVD player, PC, all in one box that they get the revenues from?

It will be interesting to see how successful Microsoft will be with their current networking desires that follow their .NET and passport ideas, and whether or not these too will fail or just become immensely unpopular. Regardless, the deathly grip they hold on the OS market has yet to see a legitimate adversary, so it will be a long time before we see the complete downfall of Microsoft.

.NET will happen, and it will succeed famously, at least in the Windows world. It's simply the next logical step for Windows development, even if we ignore the cross-platform and passport elements. The number of developers and businesses out there that declare anything made by MS to be divine gospel will see to that. Whether or not it's accepted by those that aren't followers of Redmond remains to be seen, I think, and I'm sure it won't come without a fight.

Sun knows fighting .NET is their priority. They know they have an uphill battle ahead of them, and I know they'll fight it, because losing it will make life extremely difficult for Java.

Re:MS is running outta juice!

This is not an "inopportune" time; this is exactly the time when MS needs to expand into other businesses. (See my other post to this article.) Desktop OS revenues are flat; nobody seems in any hurry to upgrade Office versions; and MSN TV hasn't done very well. They need to find something to satisfy their legal responsibility to their shareholders (note that this primarily still means Bill & Steve & Jim.)

As for the XBox: you're absolutely right that it's an "investment for the future", but perhaps not in the way you meant. The XBox's real purpose is clearly visible if you dig a bit deeper into their discussions with ISVs (i.e. game developers). It's called XBox.NET, in other words, a $10 or $20/month online gaming subscription service. The XBox is clearly targeted to the 18-35 crowd, plus it's the only console that currently ships with an ethernet port built-in.

That's where MS plans to make its money: if it sells you one game (e.g. Halo) plus 6 months of XBOX.NET at say $20/month, they make back that $125 subsidy for the hardware, then even if they never sell you another game!

And don't expect them to run out of money any time soon. Right now, they anticipate losing about $2,000,000,000 before they start breaking even on the XBox, but they have about $37,000,000,000 in the bank. According to SteveB, even with 40,000 employees (up from 30,000 just 2 years ago), they have enough money in the bank to run the company another 5 YEARS without another dime of revenue...

nope

It's not that Microsoft's trajectory has necessarily passed its apex, it's that websites like slashdot focus more attention on pointing out Microsoft's missteps. Take ANY large company and put it under the microscope ... and you'll find the exact same thing.

Re:nope

Since nobody has any crystal balls, there no way to say for sure that MS has passed its apex. Consider this, though.

Current versions of Microsoft software compete with previous versions.

For example, most of the differences that distinguish Office 97, Office 2000, and Office XP are just small features, none of which are compelling reasons to spend several hundred dollars a copy to upgrade. Probably most upgrading is done out of fear of being incompatible with other Office users, and even this fear is questionable, since despite the moanings about MS playing file format games, Office maintains pretty good backwards compatibility and can save files in Office97 formats.

Windows XP competes with Win95/98/ME. While WinXP is leaps and bounds more stable than the DOS-based Windows OSs, its hardware requirements are much higher as well, which discourages those with lower-end machines from upgrading. Most people are either just used to the instability of the DOS-based junk or don't stress the OS to the point that it's really a problem, so WinXP isn't so compelling.

Microsoft knows that its Office upgrades are offering less and less, so it's trying to switch to a subscription model, which many CEOs and CIOs are balking at.

Microsoft also is trying to diversify by getting into game consoles, but this path has been tough going, and most of MS's dirty tricks don't work so well in the console world.

Further, since MS pays its employees less than the industry average and compensate with employee stock options, MS has to keep its stock value rising at a high rate. Slow expansion or a mostly constant stock value won't do well. The Motley Fool had something on this.

Also, distrust of MS extends beyond just geeks. At the very least, hardly anyone takes the Microsoft name as a sign of quality.

There's no saying that MS won't overcome these problems, but it's not invulnerable, and the next few years, or even the next few months, depending on the outcome of Kotter-Kotelly's verdict, may determine whether MS continues to be the juggernaut that it is.

Re:nope

Further, since MS pays its employees less than the industry average and compensate with employee stock options, MS has to keep its stock value rising at a high rate. Slow expansion or a mostly constant stock value won't do well. The Motley Fool had something on this.

and.... after the Enron/Anderson debacle, there is talk of changing accounting rules vis a vis options. Companies would have to book options as expenses (strike price vs actual cost IIRC)
I think Microsoft's (and a lot of OTHER companies for that matter) 'profits' would evaporate rather quickly under this scenario. Potentially VERY ugly.

MAB

Re:MS is running outta juice!

Is it just me or can you just feel that MS's trajectory has passed its apex and is on its way back to earth??

Microsoft's current multibillion dollar empire is built on the triad of Windows, IE and Office. Unfortunately for them, all three problems addressed by these applications have been solved by the current state-of-the art in software development. So much so that hobbyists have cobbled together free applications that are competetive with all of these.

(Well, almost competitive. Microsoft still jealously clings to the trade secrets that enshrine the compatiblity quirks in the file formats and APIs of their software. This keeps everybody else at a disadvantage for now. Oh yeah, they get free device drivers from sniveling hardware vendors, too. But none of this trade secret stuff has any intrinsic value to the user; it's just inertia.)

However, Microsoft is smart enough to know that basing an empire on obscurity and solved problems is a bad thing. Thus, they attempt these pushes into new areas. The problem for them is that just because they want to shift focus, there's no guarantee that anybody wants or needs anything else from them.

An example from history is passenger jets. If you asked the aircraft manufacturers back in the 1960's what people would be flying in the 21st century, you'd get descriptions of far-out hypersonic aircraft. In the real world, we still fly in planes that are dead ringers for a Boeing 707 from the late 50's. The aircraft companies just weren't able to evolve their passenger jet technologies very far beyond that point because of the physics and economics of the real world. SSTs, for example, were a total economic flop.

Aircraft manufacturing has not been a stellar field since the 1960's. The many U.S. companies in business back then have merged down into basically 1 survivor.

The aircraft manufacturers were lucky, though, because hobbyists can't produce and disribute knockoffs of their airplanes near zero cost. Microsoft might be in a bit tighter situation over the long haul.

Worried about .Net?

When people trot out that .Net is an evil system to make everyone turn into Microsoft slaves by turning over our personal records to them, it is a disgusting display of ignorance of what .Net really is.

It is a set of services, including web services, that is designed to compete with Java.

Just because Hailstorm was to be implemented as a service of .Net does not mean that Hailstorm == .Net.

Please get a clue.

.NET is actually pretty sweet

I had used Linux and FreeBSD excusively for about two years - I even once posted a (rejected) Ask Slashdot question entitled "Why Windows," arguing that with the multimedia (mplayer) and browser (pick konq/galeon) support available in Linux, that no one needed Windows.

My viewpoint has changed radically. I have an XP box now - it's actually a pretty stable OS. And .NET delivers on all the promises that Sun had made of Java. (M$ has beaten them - intsead of "write once, run anywhere," .NET offers "compile once, run anywhere.")

I still use Linux/Apache/MySQL for all of my servers - and with SQL 2000 at $20,000 per processor that won't change anytime soon - but Windows has gotten more stable. Linus once said that he started Linux because he wanted software that didn't stink...win3.1, win95, and win98 all stink, but 2K and XP are actually pretty nice.

I will probably switch back over to an all OSS setup when Miguel et al finish Mono. That's gonna be sweet, too - imagine the day when you can compile an executable (not java bytecode) on a {Windows, Linux} box and then run that executable on a {Linux, Windows} box.

That's the nice thing about .NET - M$ has actually embraced industry standards. ASP.NET can be accessed from any client provided you have an HTTP connection. That's the only requirement. I sitll support the paranoid people, because there is always the chance that M$ will extend and extinguish what it has embraced, but with them having submitted everything to ECMA, that's really an outside worry.

Re:.NET is actually pretty sweet

NET offers "compile once, run anywhere.")

Sure, for very small definitions of anywhere. Anywhere will probably not even include all versions of windows (e.g. win98), and it certainly won't include much of the unix world for the forseeable future.

At least Java is somewhate widely supported on varying platforms. How does .NET even come close?

Don't be fooled, this is more vendor lock-in dressed up in sheep clothing.

Re:.NET is actually pretty sweet

with SQL 2000 at $20,000 per processor that won't change anytime soon

Nice of you to quote the highest possible price per processor. We have SQL Server 7 licensed for two processors, it was expensive, but NOWHERE NEAR $20,000 per proc! I just checked the SQL 2000 licensing. Yeah, $20K per proc for the ENTERPRISE EDITION. This is like on Spaceballs where the guy orders the ship to go at "LUDICROUS SPEED!"

SQL Server 2000 is $5K per processor for unlimited client access. If you've only got 5-25 people accessing, it's less than that ($1K-$2K).

It's also not really fair to compare it to Linux/Apache/MySQL, as SQL Server 2000 beats MySQL on MANY fronts, including speed and options.

I'm no fan of MS in general, but SQL Server 7 is the best piece of software I've ever used, and I'm sick of the FUD.

I sitll support the paranoid people, because there is always the chance that M$ will extend and extinguish what it has embraced, but with them having submitted everything to ECMA, that's really an outside worry.

Ahh yes... an outside worry. More like even-odds!

Good luck, though.

Re:.NET is actually pretty sweet

And .NET delivers on all the promises that Sun had made of Java. (M$ has beaten them - intsead of "write once, run anywhere," .NET offers "compile once, run anywhere.")

And .NET has much wider support for quantum computers than Java. Just as soon as Microsoft gets around to implementing it, of course.

Re:.NET is actually pretty sweet

.NET offers "compile once, run anywhere.

Really. And you know this before there was an implementation for more than one operating system how? At least Sun has some motivation to support more than one operating system; there's no particular reason for Microsoft to support more than Windows. I suspect that Microsoft will make sure Unix/Mac implementations exist for PR, and then go ahead with complete disregard for compatibility with them.

imagine the day when you can compile an executable (not java bytecode) on a {Windows, Linux} box and then run that executable on a {Linux, Windows} box.

Why is .NET bytecode an executable and Java bytecode not? Six of one and half dozen of the other. Anything you can do with one you can do with the other.

with them having submitted everything to ECMA, that's really an outside worry.

Because Microsoft couldn't twist a standard, or omit important material from a standard or leave a standard vague in certain spots.

.Net is nothing special

(M$ has beaten them - intsead of "write once, run anywhere," .NET offers "compile once, run anywhere.")

What, you mean suddenly I don't have to compile my java code in order to run my programs?!? AWESOME!

imagine the day when you can compile an executable (not java bytecode) on a {Windows, Linux} box and then run that executable on a {Linux, Windows} box.

Get your head out of your behind for a second and think about what you are saying. See that part above that says "run anywhere"? "Anywhere" does not equal just the Intel x86 processor. Also, not all OSes use the same object and linking formats for runnable binaries even if the OSes both run on the same hardware architecture. What is the end result to you, the .Net user? A virtual machine or just-in-time compiler for intermediate bytecode! Funny, that's exactly what many Java implementations do, isn't it?

There is, in fact, a whole separate specification for just the Java Machine itself. That means that, in theory, it would be possible to write a compiler that could take other programming languages as input and output Java Machine bytecode. Wow! Just like .Net! How about that?! Amazing.

Sure, .Net binaries might be able to store pre-compiled versions of those programs for certain targets but that is just a caching problem, and .Net isn't the first system to do something like this. It's not really even a very difficult problem to solve.

I submit that Microsoft is merely re-inventing the wheel with their .Net stuff because Sun wouldn't play ball and let them extend Java any which way they wanted to. Big fat hairy deal. It's just one more standard people will get to choose from. And, as Andrew Tannenbaum said, standards are great because there are so many to choose from!

Re:Worried about .Net?

I'll respond to this one because it's at the top of the list in nested view. Hate me for it ;)

.NET isn't a set of services, some of which are web services. It's an umbrella term for all new Microsoft applications - and it's marketing. You have Office XP.NET -- you have Visual Studio.NET -- you have Windows .NET.

Sometimes, .NET means applications that compile (or whatever) to CLR. Othertimes not.

Sometimes it's about the framework, and the clean Win32 api as seen in .NET Windows Forms. Sometimes it's the next version of ASP that they've called .NET Web Forms. Sometimes it's nothing to do with the framework. Sometimes it's just SOAP.

More to the point however I don't particularly blame the people ignorant of .Net. Microsoft did an exceptionally poor job of explaining themselves (which I believe was marketing, and intentional).

The thing that I realised a few months ago is that the giddy hatred of Microsoft we all felt back in '99 is only now trickling down to the general populus. That Microsoft didn't explain .Net clearly allowed these people to fill it in with paranoia, and hate, and conspiracies.

There's no particular reason why a database of personal details is a bad thing. It's only because the world is starting to laugh at the latest security hole that it's bad.

I read a Microsoft interview once that software goes in trends, like fashion, like shoes. Nike are in for five years, and then they're unwanted for five. Good companies learn to go with the wave, and Microsoft understood this. They predicted that they would be unpopular until at least 2005, and they'd plan their products around that date. This is the date to watch.

Microsoft are on their way out. They'll still be important. With that ammount of the desktop they are assured that. But they're not going to be the first choice any more - at least not for a few years.

Questions the article doesn't answer

• What happens to passport?

  Microsoft was going to open up passport authentication to third-party ID servers via passport, right? Or am i just confused about that? Is that not happening anymore?

  Is microsoft abandoning their drive to make Passport the authentication mechanism for *everything*, Starbucks and such, or are they just going to drop the pretense of making it an open system?

• The way i understood it, Hailstorm was a relatively decentralized technology as designed and didn't really DEPEND on microsoft being there to hold it all together. Right? Is it possible for people to take the hailstorm protocol, if they so desire, and set up an independent, decentralized hailstorm network that just happens to not be affiliated at all with microsoft?
• Was GNOME MONO planning on implementing hailstorm as part of their .net workalike? Are they still going to?

Some answers

Is microsoft abandoning their drive to make Passport the authentication mechanism for *everything*, Starbucks and such, or are they just going to drop the pretense of making it an open system?

Passport [passport.com] was a seperate initiative from .NET MyServices [microsoft.com] (aka Hailstorm). Passport is an authentication mechanism while .NET MyServices was supposed to be a centralized repository of user information (calendar, preferences, inbox, contacts, bookmarks, etc) which could be queried by various vendors who would receive restricted access to the data based on the user's settings.

Is it possible for people to take the hailstorm protocol, if they so desire, and set up an independent, decentralized hailstorm network that just happens to not be affiliated at all with microsoft?

There are a couple of things to consider here. The first being whether there are any intellectual property(IP) issues, I have no idea about this but wouldn't advice anyone to start something like that without at first ensuring there aren't any patents or anything like that being violated. The second thing is exactly how one would use the technology. Personally when I first saw a Hailstorm presentation last summer I kept on thinking that it may face difficulty in gaining widespread acceptance for exactly the same reasons listed in the article; there was no justification for vendors to give up so much control to user information to a third party. One example touted was the ability to move music preferences from website to website but the question never asked is why Amazon.com [for example] would make it easier for users to grab all their painstakingly entered personal preferences and music ratings to CDNow.com or some other online site. I remember emailing the presenter about my thoughts but couldn't follow up since it happened close to the end of my internship. However, it may work within a closed environment like a corporate intranet but then again MSFT already has Exchange which has a lot of the important functionality that would be provided by .NET MyServices like an inbox, contacts, calendar etc.

Was GNOME MONO planning on implementing hailstorm as part of their .net workalike? Are they still going to?

Gnome is not related to Mono. Miguel De Icaza may have founded both but he no longer maintains any packages for Gnome nor does he do much (if any) active development but instead spends most of his energy on Mono.

As for your question, Mono is not interested in Passport or Hailstorm [go-mono.org] and went as far as creating a page about it because people kept on getting misconceptions about it.

Disclaimer:This post is my opinion and does not reflect the views, opinions, intentions or strategies of my employer.

For once, perhaps marketing was a good thing?

>It seems the companies didn't like having a middleman between them and the consumers

Gee, who'd have guessed. Microsoft, the company who's trying to incorporate every possible end-user application into their OS (thus killing the middleware, shareware, and even some commercial software industries) didn't see this coming? They couldn't imagine that other companies might have the same interests in mind? Aside from the obvious consumer objections, it should have been obvious to Microsoft from the get-go that other companies aren't going to trust them to keep track of userdata.

CBDTPA universally rejected and Hailstorm bites the dust. I have to say, today was a good day.

-s

Re:For once, perhaps marketing was a good thing?

CBDTPA universally rejected and Hailstorm bites the dust. I have to say, today was a good day.

Not to mention no barkin' from the dog, no smog, and mama cooked the breakfast with no hog.

Yay - now get Messenger outta my face

Maybe now they'll stop trying to cram Windows Messenger down everyone's throat (signing up gets you a Passport account). If you've used Windows XP you know what I'm talking about.

Re:Yay - now get Messenger outta my face

Hopefully if you've used Windows XP you know about Start>Run>

RunDll32 advpack.dll,LaunchINFSection %windir%\INF\msmsgs.inf,BLC.Remove

to uninstall MSN Messenger completely.

Now if only they had this for mediaplayer 8 =(

damn bad timing

"They ran into the reality that many companies don't want any company between them and their customers," said David Smith, vice president for Internet services at the Gartner Group (news/quote), a computer industry consulting and research firm. [...] "There was incredible customer resistance," said a Microsoft .Net consultant, who spoke on the condition that he not be identified. Microsoft was unable to persuade either consumer companies or software developers that it had solved all of the privacy and security issues raised by the prospect of keeping personal information in a centralized repository, he said.

Even if you give them the benefit of the doubt [*cough*] it seems like they jumped the gun just a bit.

After all they are just now wrapping up the one month security review they started back at the beginning of february. yep, that is still going on.

So this is a case where vaporware was not being bought at all, working against them instead of working for them.

Re:.Net != "Hailstorm"

http://arstechnica.com/paedia/n/net/net-1.html

For those that are interested in learning what .NET actual is and is not. The article gives a nice broad technical overview.

Re:.Net != "Hailstorm"

Microsoft has pretty consistently touted the networked XML web services part of the .NET framework as the 'best part'. Which I think is complete bullshit. The 'best part' about .NET is the fact that it is compiled, managed, sandboxed code with a truly awesome set of tools to play with. Improved data management, almost every object in it is serializable (you can save it to the HD in text or binary format, and reload it later, built in, no extra coding).

There are a lot of reasons to like .NET... in fact, the only reason I know of NOT to like .NET is the usual 'Windows Only' bullshit. But it's a MS product... that's a given.

Re:.Net != "Hailstorm"

There are a lot of reasons to like .NET... in fact, the only reason I know of NOT to like .NET is the usual 'Windows Only' bullshit. But it's a MS product... that's a given.

Well, as a Mac user for over 10 years, I'd rather not have .NET overtaking the market., and having to deal with another Windows-only situation.

(I submitted the article, BTW.)

Maybe that clarifies a bit...

mark

Re:Cheers! They realized it was doomed from start.

I can say though... EVERYONE that I know with an MCSE and/or works at a MCSP (MS Cert Solutions Provider) was in support of the Hailstorm idea.

Uh...not every MCSE out there.

I was, to be frank, worried about its implications for security. Having Microsoft guard the keys to my bank account is like having the fox guard the hen house.

Nice to see it go. Now .NET can stand or fall on its own merits, not on privacy concerns.

Perfect Headline

Hailstorm fails to put dent in market.

The real reason it failed...

Couldn't get it to run on Apache over BSD.

They'll just keep trying

If MS truly sees the market as being essential to their revenues, they'll just keep going until they borg out the other players. In fact, this is in line with their history of rejected/crappy first releases/attempts.

Now that's interesting

This isn't exactly the first time Microsoft has chosen to scrap a project that has been so heavily advertised, but it's definitely one of the most prestigious ones they have cancelled.

Hailstorm/Persona was supposed to be a .NET service that "authenticates users, provides the ability to send alerts, and stores personal information, including contacts, e-mail, calendar, profile, lists, electronic wallet, physical location, document stores, application settings, favorite Web sites, devices owned, and preferences for receiving alerts." (from Microsoft)

I think the key problem for Microsoft is the following (from the article:) "They ran into the reality that many companies don't want any company between them and their customers,"

Bill and Steve are probably a bit surprised, not used to having people say No to them, especially not the big companies that they have started to court now that they have a consumer market monopoly. .NET is crucial to get penetration on the Big Market, i.e. mission critical business application software.

Hailstorm/Persona was seen by many as a reference implementation of .NET's, showing off its capabilities. Now it's going to be interesting to see how the industry acceptance for .NET evolves.

This time, M$ discovers that FUD is a 2edged sword

Their lack of credibility has finally caught up with them.

IMHO, Microsoft is incapable of leading any kind of initiative that requires third party support. That would require finding third parties that trust Microsoft -- a dubious proposition indeed.

Re:Dumb question for the /. editors....

Blockquoth the poster:

My question is this: if Slashdot editors really feel this way, then why is Slashdot advertizing Visual Studio .NET in its banner ads?

Um, because -- as with most news sources -- advertising is kept separate from editorial content?

Microsoft Marketing

I see Microsoft as 2 distinct groups.

• Microsoft marketing
• Microsoft Developers

Who do you think had the whole HailStorm idea? Marketing.

You can almost hear the conversation in the meeting
Marketing: "This will be great! People can log in from anywhere!"
Developers: "Yeah, that's technically possible."
Marketing: "Then Go! Go! Go!"

I imagine starting HailStorm and canceling HailStorm were topics of fiery debates inside the Fortress of Microsoft.

Finally a techno Exec probably said "This is stupid. Who is really going to sign up with us? Pay Microsoft to authenticate their users?"

One more thing....Figure out what .NET before you talk about it. FUD.

Wither the Liberty Alliance?

So now that their competition has gone away, what happens to the Liberty Alliance? Will they stick together, or each go their separate ways creating their own separate identity database schemes?

Canceled Persona

So, if Microsoft has canceled Persona, does that mean we can refer to it as Persona Non Grata [askoxford.com] ?

Ack! Stop with the rotten fruit already!

For those with the tin foil hats on...

Here's the article text:

April 11, 2002

Microsoft Has Shelved Its Internet 'Persona' Service

By JOHN MARKOFF

SAN FRANCISCO, April 10 -- Microsoft (news/quote ) has quietly shelved a consumer information service that was once planned as the centerpiece of the company's foray into the market for tightly linked Web services.

The service, originally code-named Hailstorm and later renamed My Services, was to be the clearest example of the company's ambitious .Net strategy. It was intended to permit an individual to keep an online persona independent of his or her desktop computer, supposedly safely stored as part of a vast data repository where there could be easy access to it from any point on the Internet.

At the time of the introduction of My Services, Microsoft also proclaimed that it would have a set of prominent partners in areas like finance and travel for the My Services system. However, according to both industry consultants and Microsoft partners, after nine months of intense effort the company was unable to find any partner willing to commit itself to the program.

Industry executives said the caution displayed by consumer giants like American Express (news/quote) and Citigroup (news/quote ) illuminated a bitter tug of war being fought over consumer information by some of the largest financial and information companies.

"They ran into the reality that many companies don't want any company between them and their customers," said David Smith, vice president for Internet services at the Gartner Group (news/quote), a computer industry consulting and research firm.

The lack of interest also indicates that in a variety of industries outside the desktop computer business there remain significant concerns about Microsoft's potential to use its personal computer monopoly and its .Net software to leverage its brand into a broad range of service businesses.

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An early signal that the My Services idea was in trouble came last fall at Microsoft's annual developer's conference, attended by more than 6,000 programmers. The sessions on My Services were poorly attended, an attendee said.

"There was incredible customer resistance," said a Microsoft .Net consultant, who spoke on the condition that he not be identified. Microsoft was unable to persuade either consumer companies or software developers that it had solved all of the privacy and security issues raised by the prospect of keeping personal information in a centralized repository, he said.

Microsoft executives acknowledged the shift in strategy and said the company was still contemplating how it would bring out a revised version of the My Services technology. The decision resulted in a relocation of several dozen programmers in December from a consumer products development group run by Robert Muglia to the company's operating systems division.

"We're sort of in the Hegelian synthesis of figuring out where the products go once they've encountered the reality of the marketplace," said Charles Fitzgerald, Microsoft's general manager for platform strategy.

He said part of the decision to back away from a consumer version of My Services was based on industry concerns about who was going to manage customer data. The issue, he asserted, was more of a sticking point within the industry, rather than among consumers.

"We heard a lot of concern about that point from competitors in the industry but very little from our users," he said.

Microsoft is now considering selling My Services to corporations in a traditional package form, rather than as a service. The companies would maintain the data for their own users.

"Frankly selling this stuff to people who build large data centers with our software is not a bad model," Mr. Fitzgerald said.

Microsoft first introduced the Hailstorm services idea at a news conference at its headquarters in Redmond, Wash., in March 2001. At the time, the technology received endorsements from a handful of corporations including American Express, Expedia (news/quote), eBay (news/quote), Click Commerce (news/quote) and Groove Networks.

At the time of the announcement, Microsoft described Hailstorm as a way for a consumer to have a consistent set of services, like e-mail, contacts, a calendar and an electronic "wallet" -- whether sitting at a desk or traveling and using a wireless personal digital assistant.

"Microsoft's `Hailstorm' technologies open exciting new opportunities for us to use the Web in ways never thought of before, helping us to continue to deliver service that is truly unmatched in the industry," Glen Salow, the chief information officer of American Express, said at the time in a statement.

More recently, however, American Express officials have told computer industry executives that they remain concerned about being displaced by Microsoft's brand in such a partnership.

A company spokesman said in a telephone interview today that American Express had intended to endorse the broader notion of integrated Internet services last March, not My Services specifically. He said he did not know if the company had discussions with Microsoft about becoming a My Services repository.

Several industry consultants who work with Microsoft said that the company was now planning to deploy My Services as a software product for corporate computer users some time next year, after the company introduces its .Net operating system.

"Enterprise customers were telling Microsoft, `We like this idea but we don't want to be part of this huge public database,' " said Matt Rosoff, an analyst who follows the company at Directions on Microsoft, a market research firm in Kirkland, Wash.

When it was introduced, the Hailstorm plan quickly became a lightning rod for privacy advocates who saw dangers in concentrating vast amounts of personal information in a single repository.

Last fall a coalition of privacy groups complained in a letter to the Federal Trade Commission about the potential risks inherent in Microsoft's collecting personal information from and about several hundred million personal computer users.

My Services also created thorny privacy issues for Microsoft in Europe, because of restrictions on transborder data transfers there. Microsoft has not resolved how personal information stored in one country can be easily transmitted internationally.

Microsoft won't give up - DRM is coming...

Though I don't doubt that Microsoft had trouble interesting others in Hailstorm, I don't think Microsoft's push to get a piece of every transaction has been abandoned. My gut instinct is that they think that they can have better success with using DRM for this purpose.

Consider: Hailstorm required the cooperation of other companies, who were reluctant for many good reasons to pay for the privilege of placing Microsoft between themselves and their customers. (Customers were also none too thrilled about the idea, either.) There are companies that might find Microsoft's desktop OS monopoly a sufficiently compelling reason to justify such a move, though - companies selling bits (media and software). Only Microsoft has the leverage over desktop users to foist user-hateful "digital rights management" technologies upon them. (I don't just mean technology to prevent copying of "protected" media, but also watermark detection/embedding, etc.)

Given a DRM system integrated sufficiently into the OS, some control over unauthorized data manipulation may be possible - at least, enough to deter most users. The legal billy-club of the DMCA (combined with Microsoft's practically infinite legal budget) is already in place to deter companies or individuals enabling circumvention, and patents are likewise in place to thwart competitors and open-source alternatives. When Microsoft's ubiquitous rollout of DRM is complete, they may be able to play to the paranoia of media companies desperately grasping for something, anything, to tame the very nature of the bit - to make it uncopyable. This again places Microsoft in the revenue stream (and customer data stream), but by offering something more compelling than mere data aggregation.

Their quiet backing of the SSSCA/CBDTPA is only the beginning, I think of this new push. Hailstorm was unappealing to companies and a magnet for criticism, but DRM leverages Microsoft's existing monopoly so I think they'll translate their goal of skimming off every transaction to this arena.

Just MHO,
-Isaac

This is how it starts.

People have been pointing out that Hailstorm/Persona was NOT the bulk of what .NET My Services is, that this isn't as bad a blow to Microsoft as some people are making it out to be. And they're right. Kind of. But I've seen this coming for years. I've known for so long that Microsoft only has so much steam left in it, and this is one of the first signs that it's slowing down.

Hailstorm was Microsoft's attempt to become the middleman in a wide range of web transactions. It didn't work, and for a good reason--companies don't like middlemen, especially those as powerful as Microsoft.

When you think about it, .NET My Services is the same thing. It's another Microsoft attempt to become the middleman, so to speak; they want to be the one in charge of how everyone works together. Doesn't it seem obvious at this point that technology companies will, sooner or later, go the same path with .NET as online businesses did with Hailstorm?

Granted, Microsoft has put a lot more marketing clout behind .NET My Services, so they probably aren't going away in the immediate future. But the technology industry is unpredictable, and it can change incredibly fast sometimes. We may be seeing the first steps towards an era of Microsoft-free computing.

This alternative may be worse

Microsoft is now considering selling My Services to corporations in a traditional package form, rather than as a service. The companies would maintain the data for their own users.

"Frankly selling this stuff to people who build large data centers with our software is not a bad model," Mr. Fitzgerald said.

IOW, a common code base with the typical MS attention to security, but maintained by thousands of clueless sysadmins rather than by a single company who at least might see fit to install updates. So instead of a single point of failure, you suddenly have hundreds. Fun!

MS proposal not a winner?

I think the most important part of this news is that MS threw a party and no one showed up. A few years ago, if MS came out and said "We've got this idea where everyone will wear celery on their head!". Pepole would have jumped on board because it was MS. Now everyone is more realistic and even overly cautious about doing business as an MS "partner". That in and of itself is great news.