Caught in the net

During the summer, I had a visit from Craig Mundie, a top lieutenant of Bill Gates who serves as Microsoft's chief strategist for technology.

He has served Microsoft in many capacities, overseeing many of its forays into next-generation software and consumer products. He stays close to the Microsoft line of thinking, but his job forces him to think well outside of the box.

His view was that while the PC is not going away, and indeed will be at the centre of a digital lifestyle, the next real challenge will be to create an architecture that makes the internet the focus of software development. His comments have stayed with me over the past few months, and I have come to realise that IT has indeed shifted dramatically.

The change did not happen overnight. As early as 1995, companies were starting to develop software and services that were strictly delivered over the internet. But the work was aimed mainly at web publishing, repurposing of content ecommerce services, and a few basic internet applications.

But recently it has become clear that future applications will reside and be delivered strictly from the internet itself, and the reality of this concept is only now starting to hit home among developers and IT managers. Many developers at Microsoft's software developer's conference in Los Angeles attended simply to try and understand Microsoft's .Net strategy.

Microsoft has been touting this concept for two years, but one of its top managers told me that only in the past six months has the company finally come up with the right way to explain .Net. Basically, Microsoft is trying to move developers into creating applications for the internet rather than for the PC and Windows XP.

Microsoft's current cash cow is still the PC, Windows and Windows applications; in the future it plans to make money via .Net application tools, licences and services, all delivered via the internet. Shifting developers away from the PC was not easy.

Microsoft gives more credence to companies that have already blazed the internet applications trail, such as Upshot, which was the first to provide a web-based Sales Force Automation product. Many Java developers have also spent years working with a programming environment that has been critical to the development of first-generation internet applications, albeit usually rather lightweight in nature.

.Net challenges developers to create industrial-strength applications that can be delivered over the internet and are mainly hosted from a company's servers and deployed in a distributed fashion throughout an enterprise.

IT departments still operating within client-server architectures tend to view a move towards developing applications around the internet as both radical and extremely costly. In fact, some industry economists predict that over the next three to seven years, IT budgets will leap from three per cent of sales to as much as 10 per cent of sales as companies make this move.

This idea is staggering to most IT managers, not only because of its complexity, but also due to concerns about security, management of distributed servers and retraining of their staff. Add this to the need for broader wireless bandwidth and security for field applications, and you can see why IT directors are not jumping quickly onto the bandwagon.

But executives who once equated the internet with ecommerce are now realising that it is critical to the way they handle their entire business operations - including their relationships with their suppliers, partners and customers.

And, they are starting to understand how important the next generation of application development tools is.

That is why the development war has shifted from the PC to the internet and the stakes for Microsoft, Oracle, Sun, Intel, HP and many others are bigger then ever.

In fact, Sun and Oracle have already mounted their own versions of the .Net concept, and the world of Open Source and Linux have become key components of a competitive counter to Microsoft's view of the world. This competitive threat is real, but Microsoft has the edge with its release of Visual Studio.Net, an arsenal of applications tools.

Microsoft has the clout, developer relations, support and consulting organisation to make its approach highly attractive to major enterprise developers who will clearly need some serious hand-holding as they move applications from the PC to the internet.

Moving away from a PC-centric world to an internet-applications-based one will be slow. It is clear that from this point on, the debate has shifted and the next major battlefield will be for the hearts and minds of corporate developers who must soon decide what architecture they bet on to build their next-generation enterprise applications.

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