Microsoft's nightmare inches closer to reality

As early as May 1995, three months before Netscape Communications’ initial public offering sparked the dot-com boom, Microsoft executives were worried that the nascent World Wide Web could one day become a significant threat to the Windows franchise.

In an extensive memo called “The Web is the Next Platform” that was introduced as evidence in Microsoft’s antitrust trial five years ago, Microsoft engineer Ben Slivka described a “nightmare” scenario for the software giant.

“The Web…exists today as a collection of technologies that deliver some interesting solutions today, and will grow rapidly in the coming years into a full-fledged platform (underlined for emphasis in the original memo) that will rival–and even surpass–Microsoft’s Windows,” Slivka wrote.

Microsoft, however, didn’t heed the warning. Instead, it embarked on a strategy–championed by Jim Allchin, who today heads up development of the next version of Windows–that was fanatically focused on the operating system.

Fast-forward 10 years: The nightmare is inching closer to reality and Microsoft execs are apparently paying attention to the decade-old alert. As part of a management shuffle, Microsoft said Tuesday it would make hosted services a more strategic part of the company and fold its MSN Web portal business into its platform product development group, where Windows is developed.

Full article: CNET News.com