The Manhattan Project

waveGoogle Wave may be a big deal for Google, but it’s an even bigger deal for Microsoft. It forces Redmond to step up at the very time it would rather run silent and deep. Correct that: those owners of the crown jewels who’ve guided the aircraft carrier for decades would rather ignore the impact of these two brothers and a product manager who moved Down Under to build what may well be Google’s realtime core.

Windows may be more protected from the Wave than Office, which must now confront not just a new feature set but a disruptive route-around of the core document formats. When Lars, Jens, and Stephanie demonstrated a Wave extension that provided robot-scraping grammar-checking in realtime, they put the lie to the common wisdom that Office was invulnerable to the Web. And in the process, they changed the monetization model for Office as well.

What happens when Wave applications store not just the deltas between document actions but the actions we take in response to incoming information? Let’s say the micromessaging stream reports some event that suggests a shift in interest rates, which in turn is noticed by a robot on guard for relevant changes to your financial position and assets. This in turn triggers a message that is sent to your broker, or a transaction commitment to buy at a certain level, or a pushed reminder to click yes to authorize the purchase of flowers for Mother’s Day, etc.

In Wave-ese, robots are Trackers. And in Track-ese, sharing those gestures is a monetization engine of unparalleled efficiency and value creation. Instead of thinking of your value as being generated by what you say or type, think of it as a stream of content, context, impressions, lack of gestures, and other high value information that those who’ve learned enough about you value access to that stream. Add the cumulative streams of the overlapping clouds emanating from your center — the ripples of those you follow and those that follow those you follow — and you have the next generation of discovery, a meta-search.

What follows is an appstore for gesture streams, with data supporting the predictive nature of the best of those streams. Today’s complaints about too many tweets and rush hour data storms are the early signs of markets for efficient triage of information. The payload/URL construct will lead to new versions of Google and other Readers that absorb and replace the RSS reader with dynamic socially-filtered robots that present only the most targeted information. In effect, Wave robots will be dynamic instantiations of socially-tuned rules engines, drawing on the services of Wave extensions to add processing and rendering to the output stream.

The new media will emerge from this primordial soup in short order, squeezed under pressure from accumulated information glut into the oil that the social engine runs on. How-To’s will become a combination of instructions and tests of how well the tasks are completed. These hybrid stories/tutorials will use the feedback loop to tune themselves for greater effectiveness, and the broader success of marketing those products among the social cloud will lower the price while increasing revenue and features. This is the feedback loop Bill Gates and company exploited in the Windows generation.

How the new Windows absorbs the old one is Microsoft’s dilemma, and also an enormous opportunity handed to Ray Ozzie and his team by Wave. Wave’s delta-driven XML streams are directly descended from the Groove architecture, and Live Mesh can be seen as a similar reboot of its parent as part of Windows 7 and Live. In effect, both companies are now at roughly the same place in integrating realtime into the respective architectures. Like Wave, Mesh started as a small skunkworks project and is now being integrated into the shipping OS under Windows chief Steven Sinofsky. Sergey Brin was equally clear about Wave’s trajectory inside Google.

Microsoft has great momentum and the firewall of inertia in the enterprise. Office is buttressed at many institutional levels, governmental, corporate, and legal. But once dynamic documents proliferate and business gets done increasingly across corporate domains, the traditional document types must adapt or corrode and disintegrate. Here again, the Wave robots look like cute R2D2s for finding the latest sales and Craigslist freeware, but enterprise extensions will start taking off once Wave gets the Apps green light. A dynamic document that hits iPhone, Gphone, and netbook in realtime will go viral with the same speed it rolls out of the various appstores.

Put simply, the Office team has no choice but to accelerate its move to the cloud. First place they have to jump is at the center of the desktop, with a micromessaging app. Can Outlook be reworked quickly enough to counter a Wave Reader? See how the mind is focused when you compare the two timelines? Google Reader reworked may not be quick enough for some of us trackheads, but all it has to do is beat the Exchange team. Unless a Manhattan Project is formed that works with a realtime micromessaging version of Bing to produce a rich Silverlight-based client with — yes, HTML 5 support in the very markets IE can’t currently support.

Crazy sounding, isn’t it. Right now the best browser for Windows and netbooks could be Chrome/FireFox, and what better way to stay in the game until a Silverlight/IE hybrid provides a direct competitor/complement to Wave/Chrome. Microsoft can compete with Visual Studio against Google Web Toolkit, and its army of .Net developers can port their enterprise apps to Silverlight and add realtime extensions. If they don’t, they’ll move to Wave and its greener realtime pastures. This is the language Microsoft understands: developers, developers, developers.