An emerging Web development technique promises to shake up the status quo in PC software and blur the line between desktop and Web applications.

Over the years, desktop applications tied to a specific operating system have become entrenched as the main way to work on a computer. AJAX, a set of development techniques standardized over the past eight years, could change all that by bringing more sophisticated interfaces to Web applications. With that, backers are hoping it can open a crack in the dominance of desktop software like Microsoft's Office, the undisputed market leader.

"This is a space that's crying out for innovation," said Scott Dietzen, president of messaging start-up Zimbra. "At this point, there isn't a company that's up to challenging Microsoft. But we're out to change that."

This week, closely watched Zimbra plans to outline its business model and to announce that it has secured US$16 million in venture funding at the Web 2.0 conference in San Francisco. The San Mateo, Calif.-based company said it will launch its e-mail server software as a free open-source edition next month. Customers can pay a yearly subscription fee for updates and support, and a higher-end version will be available for a price.

Zimbra is one of a growing number of companies that are betting that AJAX, which stands for Asynchronous JavaScript + XML, will turn out to be more than just a catchy abbreviation. In the development style, programmers use a number of standards-based technologies, notably JavaScript and XML, to write applications. Many Web entrepreneurs and established software providers are hoping that AJAX can reinvigorate the PC software business by marrying the graphical user interface of desktop computers with the benefits of the Web.

Clearly, nobody expects AJAX-style applications--just now entering the market--to overtake Office anytime soon. Microsoft has long controlled more than 90 percent of the desktop software market, and the company's Information Worker unit, which includes Office and related tools, generated more than US$11 billion in revenue--more than one quarter of Microsoft's total revenue in fiscal year 2005, according to the company.

But companies like Zimbra are paving the way for others to enter a market long thought to be stagnant.

"My sense is that we're just seeing the tip of the iceberg when it comes to browser-based applications," Dan Grossman, venture capitalist at Venrock Associates wrote in a recent blog posting. "There are many more on the way, and we'll be increasingly amazed with what can be done," he noted.

Several smaller companies are in the early stages of building AJAX-style applications that are Web-based alternatives to many PC mainstays, potentially luring away Microsoft customers. Examples include project management application Basecamp and an online calendar program now in beta from CalendarHub.

At the moment, Web pages are limited, compared with most desktop applications. AJAX frees Web pages from the clunkiness they suffer from by making them more interactive and so more functional, Web developers say.

Using AJAX, developers can create an interactive user interface that's comparable to what's available on desktop applications. For example, Microsoft Outlook users take for granted that they can drag an e-mail message into a folder, but that's not possible right now with Web-based e-mail clients like MSN Hotmail. With Ajax applications, users can move items such as windows and buttons around a Web page--much as they do with programs linked to Windows or Mac OS.

"Without AJAX, we couldn't have created a user experience that was good enough," said Seth Sternberg, co-founder of Meebo.com , a three-person start-up that provides Web-based instant messaging.

Smaller software makers such as ThinkFree and Writely could eventually create the hosted Web equivalent of Microsoft Office, analyst and writer Richard MacManus noted recently.

Mashing up e-mail
Dietzen said a Web-based architecture provides benefits to IT administrators, namely a common security system and simplified management. Perhaps more significantly, the

Web-based architecture lets Zimbra combine e-mail with other applications in novel ways, he said.

"The big thing is e-mail-based 'mash-ups.' The Web is becoming this platform for collaboration. Why should we isolate e-mail?" Dietzen said.

Earlier this year, Google Maps, one of the first applications to make the benefits of AJAX development clear to a broad audience, emerged. The program enables people to use a mouse to move a map image around the screen.

Zimbra programmers have used the same techniques to make e-mail clients and servers more interactive. The company's Web-based client provides dragging and dropping calendar items and searching for past e-mails--features typically found in desktop software such as Microsoft's Outlook and Lotus Notes.

In addition, the Web-based client uses XML to combine e-mail with other applications. For example, a tie-in to the Google Maps Web service enables people to mark the location of a meeting with a Google Maps image inside the calendar application. There are also links to some packaged applications that could allow a sales person, for example, to click on a purchase order in an e-mail and pull up the relevant information directly from Oracle Financials.

AJAX-style development allowed Meebo, a San Francisco-based start-up, to jump into the instant messaging market without compromising on features, co-founder Sternberg said. The Web-based instant messaging client is expected to go into beta testing later this fall.

Even Microsoft is showing interest in the development technique. The next version of its Hotmail service, code-named Kahuna and now in beta testing, relies heavily on Microsoft's AJAX tooling . The same goes for the next Yahoo Mail client, which went into limited beta testing earlier this month.

Because these emerging AJAX-style applications are Web-based, they can be hosted outside a company network. They can also run on any operating system rather than just on Windows, analysts said.

On top of being cross-platform, Web applications can be accessed from multiple locations and from handheld devices or PCs. In addition, the Web approach could make administration of business applications easier, as it provides a built-in mechanism for backing up data and sending out updates, proponents said.

Developers can also take advantage of XML and Web services standards to fetch information from back-end data sources. For software users, this means that information on a Web page, such a search result or RSS feed, can updated automatically and without a reload of the page.

For all its promise, widespread use of AJAX still faces some hurdles. The development tools for writing AJAX-style applications are not as sophisticated as for other programming languages, industry executives said. To address this, products designed to make AJAX programming simpler have been released by a few companies, including JackBe, ClearNova and Midnight Coders.

Microsoft's grip
Although the idea of a Web-based alternative to Microsoft Office may sound threatening to the software giant, the company's products are deeply entrenched, particularly in the corporate market. The training costs associated with replacing Office alone make switching away from it very unlikely, said Joe Drouin, global chief information officer at TRW Automotive.

"The Windows-Office platform has become second nature to people," Drouin said. "There would have to be an amazingly compelling business case to convince me to go out and retrain 24,000 people on an all-new desktop environment, an all-new office environment and an all-new way of working."

For corporations, Microsoft has also gone to significant lengths to bring the benefits of Web server-based administration to Windows on the PC. For example, one feature called ClickOnce which will be available later this year, lets administrators install Windows applications from a server.

Microsoft executives argue that the rich graphics capabilities of native Windows applications, including multimedia, will outshine Web-only editions.

"The new kind of applications ISVs (independent software vendors) can make (with Windows Vista) will be dramatically different from what's possible with the Web application model. I think it's clearly differentiated," said Greg Sullivan, group product manager in charge of the Windows Vista client in a recent interview.

Still, the arrival of Web-based applications with user interfaces as good as those in PC applications is a big change. The shift is big enough to make the Web browser, 10 years after its invention, more appealing as a way for people to work with software.

"The advent of AJAX has the ability to create a structural shift people didn't see coming," Meebo's Sternberg said. "The Web wasn't ever as functional or useful as client software, and AJAX just knocks that ball out of the park."

CNET News.com's Mike Ricciuti contributed to this report.