The company's two new Internet-based software services -- Windows Live and Microsoft Office Live -- offer a revamped Hotmail, upgraded Instant Messaging and enhanced linking of personal computers to mobile devices and are "designed to deliver rich and seamless experiences to individuals and small businesses."

At Tuesday's briefing, Bill Gates, Microsoft's chairman, and Ray Ozzie, Microsoft's chief technical officer, unveiled the Live suite along with the new Xbox Live.

"These new offerings demonstrate how software is evolving through the power of services in ways that enable more dynamic and relevant experiences for people," Gates said.

"Our dream is to deliver a seamless experience where all the technology in your life and business comes together in a way that 'just works' for you," said Ozzie. "Seamless experiences put people and the things they want to accomplish at the center, with technology easily and transparently connecting them to the people, devices and information that matter most."

IT analyst firm Info-Tech Research Group called Tuesday's Windows Live and Office Live announcement by Microsoft the end of shrink-wrapped software-in-a-box and the start of the Internet-based services era. Info-Tech believes this announcement marks a turning point in the industry.

"Windows Live and Office Live mark Microsoft's first major foray into Web services," said Info-Tech analyst Carmi Levy. "Although the stated target markets are consumers and small businesses, the door has been opened for eventual migration to all enterprises, regardless of size."

Levy also said that with this announcement, Microsoft is reaching out to non-Windows users. "Microsoft needs to counter Google's relationship with Sun Microsystems and support of OpenOffice."

Sproutit CEO Charles Jolley wrote in his blog "The Big Act" at his company Web site, "These services aren't about replacing Windows or Office nor is this a retreat from the traditional Office applications. If you're looking to replace your Word, Excel, PowerPoint or Outlook with this set of offerings, you're looking in the wrong place. Likewise, this is not about a retreat from Windows as the core environment for most folks."

Sproutit creates e-mail management systems for small businesses.

David Temkin, chief technology officer at Laszlo Systems, a provider of Internet applications and services, said, "More and more a user's daily experience is going to shift to the Web, off the hard drive and on to the network. Instead of the Web being an adjunct to the desktop, the desktop is going to be an adjunct to the Web.''

He added, "We believe the next generation of Web applications will be built on open standards and with open source technologies. Microsoft's competition in this emerging market won't be from a handful of proprietary software vendors, but instead from an open source community, including many companies large and small."

Copyright 2005 by United Press International