A decade after Apple revolutionized digital music with its iTunes service, Microsoft is finally getting serious about taking on its Cupertino rival in this core market. This week, the firm announced Xbox Music, a sweeping online music service for Windows 8, Windows Phone, and Xbox that brings together functionality that today requires several different services. And coming in 2013, Xbox Music will support iPhone, iPad, and Android, too.

Unlike iTunes, however, Xbox Music will be what Microsoft calls an all-in-one music service: It combines the a la carte music-purchase functionality of iTunes with the online music locker features from Amazon Cloud Drive, the online music collection streaming from iTunes Match, and the radio-like streaming and dynamic playlist functionality of Spotify and Pandora.

“There are a lot of individual services that do a good job, but today there isn’t a service which can pull together the benefits of download-to-own, music subscription, or free streaming services,” Microsoft Corporate Vice President Yusuf Mehdi says. “With Xbox Music, what we wanted to do is bring all of that value in one simple, easy-to-use service, then build some additional value on top—make it really beautiful, and have it work across all of your devices. We’ve been able to simplify the music experience in a really powerful way.”

Xbox Music will be particularly compelling for those customers who purchase new Windows 8 PCs and Windows RT devices in the coming weeks: For six months, Microsoft will let these users stream any of the songs in its catalog of 30 million titles for free, in unlimited use (but with ads). After the six-month period is up, Windows 8/Windows RT users can stream up to 10 hours per month for free.

But Xbox Music isn’t just for Windows 8 and Windows RT. It will work with Windows Phone and the Xbox 360, and Microsoft is making mobile apps for iOS (iPhone, iPad) and Android phones and tablets in the coming year.

The big selling point of Xbox Music is that it can replace multiple competing services. It will provide unlimited streaming through Xbox Music Pass, for $9.99 per month, cloud-based music locker functionality through Xbox Music Collection, and radio-style dynamic playlists based on user preferences through Smart DJ.

“When creating Xbox Music, we started off with a simple principle: that music should never be work,” Microsoft Program Manager Scott Porter says. “That’s why we’ve put it all together to create, basically, a one-stop-shop. It’s a really nice marriage between unlimited listening, the cloud and your personal collection. We hope users out there will see that we’ve put together the world’s entire catalog that they can easily integrate with what they already own—they can very quickly simplify their digital music life.”

Compared with Microsoft’s previous online music effort, Zune, Xbox Music lets Microsoft focus now on the cloud services rather than on devices. Microsoft’s last Zune device, the Zune HD, shipped in 2009, and while it was lauded by reviewers for its innovative UI, the software giant silently shut down its Zune efforts right around the time that device launched. Since then, it’s worked to reimagine Zune inside of its Xbox brand while expanding the capabilities of the underlying platform dramatically.

You can learn more about Xbox Music in my Xbox Music Preview.