Malkiel

Microsoft's Corporate Strategy: Software AND Service

I'm pretty skeptical that people are going to partake of all these web-based services they want to offer. People will put up with the lack of security and privacy if they're offered something for free, but these guys think they're going to charge subscriptions for them--not going to happen. It will take a decade of profound and sincere and very public devotion to user rights and privacy and security to erase the contemptuous public attitude which Google and Microsoft have shown toward them in the last 10 years. Ultimately, local software mediating web access will remain the model for many years to come.

Getting subscribers to trust a web-based provider is something a small, disciplined start-up is more likely to monetize than the giants, who have already built up negative reputations that will be hard to live down.