Microsoft has announced that it will roll out online versions of its Windows operating system, in addition to other applications, kicking off what the company is calling the "live era" of software.
The company plans to release two products, Windows Live and Office Live, targeted at smaller businesses and consumers. The services are intended to generate revenue through online subscriptions and advertising.
As detailed by company chairman Bill Gates at a press event, the strategy shift was made in recognition of the increasing demand for applications that can be used from any location, not just from a user's specific desktop or laptop.
The call for services that can be accessed from anywhere, whether it is a hotel's conference center or a public library, is growing rapidly. Also, portable-computing devices are driving the need for more flexible applications and Web-based services.
The transition into unfastening applications from a hard drive is a "revolution in how we think about software," said Gates.
The products are not designed to replace the company's operating system or productivity portfolio, but users of the online versions will not need to have software installed to use Windows or the Office suite.
Windows Live will feature a set of personal services, Gates noted, including e-mail, blogging, and instant messaging.
Office Live will be available in advertising-supported and subscription versions, with the same productivity tools found in the software applications.
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Search firms like Google and Yahoo are still struggling to come up with a reliable model of creating revenue through online advertising, but they are closer today than they were in the past, noted Yankee Group analyst Patrick Mahoney.
"No one has it down yet, but the potential is there, and it's attractive," he said. "Everyone is trying to crack the online advertising market, and for good reason."
By offering Windows Live for free, Microsoft might be able to tap in to online advertising, while giving users more mobility.
"This is a big change for every part of the ecosystem," Gates said.