While Google has been busily building an online version of Microsoft's Office suite, Microsoft itself has stuck to a consistent message, arguing that the key isn't software as a service, but software plus services, an equation that conveniently keeps its Office cash cow intact. Today the company announced new offerings under its Live moniker, including a photo sharing service designed to complement photo software that comes with Vista. But it's clear that consumers and business are increasingly interested in the pure web-based model for reasons that include cost and convenience. Meanwhile, new entrants are coming into the space all of the time, looking to feed on the growing discontent with Microsoft's products. If Microsoft really believes that software plus services is the answer, then of course it should be pursuing it. But if the model is just its own vision for how best to avoid cannibalization, then it's a doomed strategy in the long run.
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