Correct in every way. The next sentence is wrong though (in my humble opinion): "Most challenging and promising to our business, though, is that a new business model has emerged, in the form of advertising-supported services and software." The emphasis is in the original. Leave the phrase out entirely and it is much closer to the truth.

The next wave of services is not promising for Microsoft. At all. Consider this scary fact: it is possible to deploy Web-based applications using services on any platform without Microsoft being involved anywhere in the development stack.

Ozzie seems to recognize this in his memo: "And while we continue to make good progress ... a set of very strong and determined competitors is laser-focused on Internet services and service-enabled software. Even beyond our large competitors, tremendous software-and-services activity is occurring within start-ups, and at the grassroots level. Many start-ups treat the 'raw' Internet as their platform. And the work of these start-ups could be improved with a services platform."

But here is another scary fact: people are not waiting for Vista. Lone developers are charging off and building amazing Web development frameworks that run on anything and target anything. Start-ups are eschewing Microsoft reasons of cost, security, scalability, reliability and the company's perceived lack of interest in small business. Even venture capitalists are getting annoyed. Google seems to be competing with them by buying start-ups just before they start looking for so-called 'A Round' funding.

So is Microsoft going to compete with Google by trying to be like Google? It looks like it. More in next week's rant (and probably the week after, too - it is a long memo with profound implications).