The biggest leap, without a doubt, is that Microsoft's vision requires it to embrace a heterogeneous computing environment. Yet Microsoft executives, historically averse to working with anything they haven't built themselves, seem united in their commitment to supporting non-Microsoft technology.

"We want to do it whether you're developing [applications] or whether you're consuming them, and whether we're delivering them or whether someone else is [delivering] them for you," says Lees.

One factor could make Microsoft's work supporting this plethora of applications easier: Software-as-a-service applications all have the same delivery mechanism — the Internet — which requires that they be built with a specific set of standards. These standards — XML, SOAP, WSDL and UDDI — are the same ones that Microsoft and IBM helped push through standards organizations like the W3C and Oasis at the beginning of the decade. (For the history of the standards process, see "The Battle for Web Services.") Microsoft will have an easier time using these standard protocols to integrate with Web-based services than it would integrating with a more traditional client/server application that uses a proprietary standard, says Dwight Davis, an analyst with Ovum Summit.

There's probably a market for Microsoft's vision, says Dave Girouard, general manager of arch rival Google's enterprise division — and it may not be that difficult to achieve, since software-as-a-service providers are going to want their applications to work with a CIO's existing infrastructure. But provisioning and single sign-on are one thing; deeper integration, like porting data from an online CRM system into a legacy ERP package, will be complicated, promises Girouard.

And in the end, superficial integration will not be enough to charm CIOs. The reason that companies will adopt a particular software as a service is that its features are a good fit, says Roger Kay, president of consultancy Endpoint Technologies. Giving CIOs a single place where they can manage their software services is a great idea — but only as long as the management interface preserves the array of features that drove a company to choose a particular software service in the first place, Kay says.

Can Microsoft truly make all sorts of Web applications communicate well and play nicely?

"That's really ambitious," says Kay, noting that Microsoft will have to interact with all kinds of proprietary file formats. "It doesn't mean that they can't do it, but it will be hard."

If Microsoft really wants to be the vendor that companies turn to for managing their IT assets, it will have to learn how to support, well, all of a company's IT assets. "They have to be willing to go cross-platform, and historically Microsoft hasn't been willing to do that," says Goldman Sachs's Sherlund. "It's a bold strategy that will require broad support of other platforms and knowledge of other systems."

At the moment, all Microsoft is offering is talk. But at least it's talk that CIOs already using open source want to hear.

"The reality of the world is a lot of companies are built through acquisition," says Ron Markezich, Microsoft's CIO. "As you build through acquisition you have a lot of different platforms, and the CIO doesn't always have the power or the budget to standardize." Markezich says that it will be up to Microsoft to learn how to work with the other systems. "Take open source," he says. "We interact with it now, but it's difficult. But it's something we have to do."

For a Microsoft executive, using "open source" in a sentence without an introductory pejorative is the first step in what promises to be a multiyear struggle.

Can They Pull It Off?

Putting the technology challenges aside, there are other reasons to doubt Microsoft's ability to execute its vision. "Their approach has always been 'put in our stuff'," says Forrester's Rymer. Changing that will require a large cultural shift for a company that has more than 71,000 employees and is about to lose its guiding visionary, now that chairman and cofounder Bill Gates announced in June that he will leave the company in 2008.

Another challenge is this cultural shift will have to take place at the same time the company is marketing Vista and Office, two products only tangentially related to Microsoft's long-term strategy. Over the next year-plus, it's unlikely that a CIO will be able to turn on a TV or read a magazine without seeing an advertisement for Office or Vista. This will keep the company's marketing and sales organizations squarely focused on the company's old product-oriented business model. In fact, for all the talk about the Live initiative in the business and IT press, trying to find out about it from Microsoft's sales department is very difficult. Barbara Gordon, Microsoft's VP of enterprise sales, says she doesn't sell 'Live' anything and doesn't know when her organization will. They're focused on selling Vista.