News

Analysts Hold Forth on Microsoft's HailStorm

• By John K. Waters
• April 16, 2001

SAN JOSE, CA—Last month, Microsoft announced Project HailStorm, an Internet-based architecture boasting an extensive set of user-definable XML-based Web services. The software building blocks grouped under the HailStorm rubric can be used to create personal networks of applications, devices, and services.

HailStorm, considered to be a key component of the Redmond, WA-based software giant's evolving .Net software-as-a-service strategy, is still in beta, with promises from Microsoft of an early 2002 release.

In a research note, Merrill Lynch analyst Henry Blodget said that HailStorm was important to Microsoft because it might increase the size and loyalty of Microsoft's consumer user base, which could ultimately create opportunities for Microsoft to charge users a monthly fee. More importantly, he wrote, "...HailStorm should make the .Net platform more attractive to third-party developers. These developers will be able to leverage both the HailStorm code and user base when building their own Web services—similar to how they leverage the Windows OS when building PC applications."

In a recent FirstTake report, analysts at the Gartner Group saw the HailStorm announcement as a clear sign that the software giant is gassing up its Web service engine and attempting to spur the emergence of a large Web services industry. "...Microsoft will likely emerge a big winner," the report concludes. "[HailStorm] will accelerate movement to Windows XP and software subscriptions. In the opinion of the Gartner researchers, the HailStorm initiative will give Microsoft "...the mantle as the industry visionary..."

The report goes on to state that, if successful, HailStorm will make Microsoft specifications the "de facto" standard, completing Microsoft's transition from a vendor of desktop software to a vendor of software solutions. It would also reduce Microsoft's dependence for revenue on version upgrades.

However, while Microsoft's dominance and leverage on the desktop is undisputed, on the Web, competitors abound—including IBM, Sun Microsystems, and Hewlett-Packard, all of which are wooing developers to their own Web-based services platforms. Nonetheless, Gartner predicts that HailStorm and .NET are likely to significantly increase Microsoft's influence in the industry. By 2006, at least half of midsize and large enterprises will open their networks and rely on HailStorm or similar services for critical business processes, the Gartner report predicts.