Microsoft's strategy in the burgeoning world of ad-supported online software calls for aggressive new business terms to undercut rivals and a familiar game plan of cozying up to developers.
At the company's Mix07 conference in Las Vegas this week, Chief Software Architect Ray Ozzie and other Microsoft executives are scheduled to lay out the elements of Microsoft's "software plus services" push, its approach to making money from hosted Web services while keeping customers tied to its desktop software.
Microsoft executives will introduce the Dyanamic Languages Runtime, software that improves support for dynamic, or scripting, languages in Microsoft tools, according to a person familiar with the plans.
The company will release a beta and Web site dedicated to Silverlight, its cross-platform multi-browser plug-in for writing media-rich interactive Web applications.
Although it's trying to break new ground in software services, Microsoft is working from a well-worn playbook. Its overall goal is to build an "ecosystem" of partners and developers who can build applications that tap into the company's online services and software.
"We very much think of ourselves as a company rooted in building ecosystems as a core competency, and that's what we want to bring to the software-plus-services world," said John Richards, director of product management for Windows Live Platform.
Microsoft said it will also detail liberal usage terms for its Web properties, allowing outside companies to build mashup Web applications that generate as many as 1 million unique visitors per month for free.
The moves are part of an ongoing transition at Microsoft as it chases online rivals Google and Yahoo in Web advertising businesses and seeks to break into the turf of Adobe Systems, which is entrenched among media editors and graphics professionals.
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With its updated business terms, Microsoft is trying to encourage Web entrepreneurs and developers to ally with its hosted services, such as Virtual Earth and Live search.
An application can have up to 1 million unique users per month without having to pay Microsoft. Beyond that, Microsoft will charge 25 cents per user per year.
These generous terms, which are explicitly allowed for commercial use, are meant to drive traffic to Microsoft sites and feed the company's online ad
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