Microsoft recently rolled out concrete plans for its .NET strategy, code-named Hailstorm, which will let the software giant make the transition from a maker of shrink-wrapped software to a company that provides software services over the Internet. Hailstorm will include base services such as email, instant messaging, alerts and notifications, calendar and address book functions, and file storage, as well as premium services that the company has yet to identify.

"Microsoft will operate Hailstorm as a business," Microsoft Vice President Bob Muglia said in a question-and-answer session held after the Hailstorm introduction. "While Hailstorm is a bold new kind of services platform, it brings with it an old-fashioned, retro business model. We think users will be willing to pay \[for premium services\]. With the meltdown of dot-com services, the Internet business model needs a reboot. This is an opportunity for the entire industry to rethink business models. Everybody knows it has to change."

To show how this not-so-distant-future product will change our lives for the better, Microsoft also rolled out its first .NET partners. Online auctioneer eBay will use .NET services to let users access eBay services through a variety of devices, such as cell phones and Personal Digital Assistants (PDAs). Expedia will use .NET services to automatically notify users when airlines reschedule or cancel flights; users won't have to visit the site to find out. And the Microsoft Passport service will handle user authentication.

Microsoft was quick to paint the services in a privacy-friendly light and explained that the move to .NET services will actually increase users' privacy and security in ways that are impossible today. "Hailstorm starts with the assumption that users control all of their personal information and decide with whom they share any of their information and under what terms," a Microsoft white paper states. "By putting users in control of their own data, Hailstorm relies on an affirmative consent model for how applications, services, and devices interact with users. The users own their data. Any access to that data, any changes to that data, and any use of that data requires the explicit consent of the users."

The idea that Microsoft will somehow be able to use the Internet to extend the company's Windows and Office monopolies to a much wider audience has some people up in arms. Microsoft competitors say the company is trying to shut them out of the market. And the companies with the most to lose, such as AOL Time Warner and Sun Microsystems, have already petitioned federal antitrust regulators to examine Microsoft's strategy. When the Hailstorm strategy was announced, AOL held a phone briefing with the Department of Justice (DOJ) and state attorneys general asking them to investigate Microsoft for anticompetitive practices. Microsoft says, however, that .NET is an open platform that doesn't shut out competition. "Special-interest competitors would be mischaracterizing the vision, which is an open-access, open-design process vision, unlike AOL's walled-garden, proprietary approach to instant messaging," said Microsoft spokesperson Vivek Varma.

Windows XP (formerly code-named Whistler) will include the first three base .NET services, and Microsoft will roll out more services by the year's end. The company will open public beta versions of its Hailstorm services during the year.