Microsoft Shifts Hailstorm's Course

NEW ORLEANS--A Microsoft technology that Bill Gates himself described last year as "probably the most important ... building block service" of the company's broad .Net initiative, is being redefined, company representatives acknowledged Thursday at Microsoft's annual TechEd developer conference here.

Microsoft's .Net My Services, previously known as Hailstorm, has long been described as a network of services controlled and managed by Microsoft that could be automatically accessed by consumers. Microsoft has touted it as enabled by technology known broadly as Web services. Users could access Hailstorm applications and content from any connected computing device.

Now, Microsoft is recasting .Net My Services into a technology that corporations or service providers will control and manage independently of Microsoft, while retaining the basic functionality.

Microsoft executives here stressed that the company isn't abandoning its consumer services. However, it has not yet determined how it will package .Net My Services for enterprise customers.

"We've not changed our vision of user-centric Web services available from anyplace. What's changed is the question of the road we're taking to get there," Adam Sohn, product manager for .Net platform strategy, said Thursday at the TechEd event.

Shifting Focus

First announced in 2001, .Net My Services has come to include a set of more than ten basic services such as calendaring, alerts, and an electronic wallet to be hosted by MSN. Microsoft has been recruiting partners such as EBay and American Express to customize those services or build their own, which could then be plugged in to Microsoft's central hosting service.

"The original strategy began as one big cloud that MSN would host and anyone who wanted could build an application that would plug into that," Sohn said.

Microsoft last fall began distributing development tools for .Net My Services that would plug into that cloud. The company originally planned to sell software to developers.

However, Microsoft quickly learned that model doesn't appeal to most of its corporate customers, mainly because they don't want to store their customer data with MSN, Sohn said. Instead, enterprise customers interested in developing .Net My Services asked Microsoft for a packaged version of the technology that they could purchase to build and host services on their own. For example, corporations might create Web services for their employees, or ISPs and Web portals might offer services to subscribers.

"We learned from everyone we talked to that the monolithic structure would not happen," Sohn said, noting that customers do not want a single storage for all customer information managed by Microsoft. "We know federation is the way to go."

While Microsoft decided to make the shift to the new model, it kept quiet most of its plans to have customers host the service on their own.

"We didn't announce it because we're delivering on the same vision," Sohn said. The new federated approach gives consumers the same benefits of accessing services and content as the original model.

Security Concerns

Microsoft got some heat from consumer groups and privacy advocates about storing vast amounts of user data in a single warehouse. Most of the controversy surrounding .Net My Services focused on the single sign-on authentication system called Passport, which lets users access and manage their various services with a single name and password.

Microsoft's bruised history with security makes it a questionable candidate for managing so much personal data, agrees Ryan Freebern, a programmer for Applied Science Associates.

"Given Microsoft's past accomplishments in the field of security, Hailstorm seemed like a risky idea at best, and a downright catastrophe at worst," Freebern said.

Some were concerned Microsoft would sell the information to marketers, said Barry Briggs, chief technical officer at Wheelhouse, an enterprise software company.

"They swore up and down that they would not make that information available to third parties, but it would be worth billions to marketers," Briggs said. "The temptation to make that (information) available would have been strong."

One analyst said Microsoft may have learned the hard way that it promoted its Web services strategy poorly by first pitching it as a consumer service.

"It sounds to me that they had put the cart before the horse," said Dana Gardner, a research director with the Aberdeen Group. Now "they're focusing on the enterprise and not so much on the end user," he added.

Expedia has already built Passport and .Net alerts into its system. The company, which was originally funded by Microsoft, said it is not fazed by Microsoft's changes, according to Suzi LeVine, director of product management for Expedia.

"It just engages other companies and services into that vision," LeVine said. "Microsoft seems as committed as ever to those services."

(Scarlet Pruitt in Boston and Stacy Cowley in New York contributed to this report.)