One product Microsoft is having high hopes for is Sharepoint. Every product has a lifecycle and it's pretty clear that Windows and Office are well into the "maturity stage" by now. Since everyone including Microsoft knows that the next phase is the "decline stage", it has become urgent to find new products to replace the inevitably shrinking revenue from the Redmond cash cows.

Sharepoint is seen by Microsoft as a the foundation for a new ecosystem that will do for the server market what Office did for the desktop. The product has been very successful so far, going from zero to $500m in just 3 years. There are good reasons for that:

• Because Windows Sharepoint Services (WSS), the entry version, is bundled with the server OS, like IE was with the desktop OS, Sharepoint has become a de facto starting point for all workgroups in search of an easy content management solution. The same guerrilla installs that forced open source into organizations -- a small group with no budget downloads some open source software, builds an application and once the business is up and running, corporate IT has no other choice than to vet the technology -- forced Sharepoint into places that would have rejected it otherwise.
  
• The out-of-the-box experience (OOBE) is very good: if you are happy to just do enhanced file sharing, simple list management with history tracking and document storage with adequate search, Sharepoint is a great tool. And simple customization is quite straightforward thanks a rebranded version of Frontpage now called Sharepoint Designer.
  
• The latest version even includes workflow features that were only available previously in much more complex and expensive products like Documentum. And because cheap storage has made the tricky aspects of content management unnecessary (offline storage management can just be brushed off by keeping all data online and metadata tagging can just be replaced altogether by a good full-text search engine), Sharepoint is able to deliver a very good entry solution for even the most sophisticated users.
  
• MOSS2007, the full version on which Microsoft is actually making money, is now just a simple upgrade to the free WSS3. While in previous iterations, the underlying technology below the free version (WSS) and the paying one (SPS) was very different, making the upgrade quite painful, this is not the case anymore. MOSS is just an extension sitting on top of WSS which makes the eventual upgrade seamless from a training and support standpoint.
  
• The very tight integration with Office Applications and Internet Explorer is a boon for Microsoft shops.
  

However not everything is rosy! There are still a number of issues that need to be addressed:

• There are many ways to extend the platform, none really compatible with one another. Sharepoint Designer, CAML, web services, web parts... If you start using one method and realize that it won't do what you need, you have to start all over again. It's very difficult to migrate customizations from one development model to the next.
  
• Documentation and support is still extremely poor for a such an ambitious product. To the extent that the latest SDK release has been called a disgrace by the development community. As for the fabulous 40, the sample applications supposed to demonstrate the power of the platform, they come with no source code, no documentation whatsoever, and not even basic peer to peer support. And as for the development of hundreds of LOB apps, this is only for internal consumption...
• Sharepoint comes with its own implementation of DLL hell: if you install any Office 2007 application you may loose the export to Excel functionality, the "edit in datasheet " view or even the ability to create Office documents! Those issues due to conflicting versions of OWC are numerous and often non documented or even acknowledged. And we are lucky when flaky workarounds even exist...
  
• Microsoft is not really trying to sell Sharepoint outside of the enterprise. Despite timid agreements with some ISPs, there is still little traction in the consumer space. With Windows and Office, the consumer segment played a crucial role in securing the enterprise market. Instead of building pale copies of iGoogle, Google Maps, Blogger, YouTube or any other Web2 flavor of the day, Microsoft needs to build a free hosted version of Sharepoint that would allow everyone to get started immediately without the need for a dedicated infrastructure or a third party offering. And it's not as if Microsoft is safe in the enterprise space anyway!
  
• The licensing model for the paying version, MOS2007, is just a joke. It requires you to buy -- and therefore maintain -- licenses (CALs) for each user accessing the site. You can buy a web license with unlimited user access but that's only allowed for non-employees! You can bet that it's a matter of time until this model changes but in the meantime it prevents a wider adoption of the product.
  
• The overall design still feels very much Web1.0 especially when used with Firefox. Ajax a.k.a. Atlas is only partially supported. In fact support for browsers other that IE, even if improved from the previous version, is still very poor.
  

In spite of the impressive early success in Microsoft shops, penetration on the web is still too limited to allow for a repeat of the lock-in Microsoft has managed to achieve with both Windows and Office. Yes, the growth achieved by Sharepoint is noteworthy but not as much as the market opportunity. Obsessed by revenue production, Microsoft is leaving market share on the table. In a sense, it is amazing that cash stranded startups will go after market share very aggressively and leave monetization for the future while Microsoft with its billions in the bank can't seem to find the resolve to do so.

Will Microsoft have created a market for other firms to own like they did with Outlook Web Access and AJAX technologies for fear of cannibalizing its existing product line? Who will own the Enterprise Content Management market, Microsoft with Sharepoint, Google with Jotspot, or some new entrants like Alfresco or Plone? Many of the products out there are as good if not better than Sharepoint already. But aside from Google no one has the clout that Microsoft has. For now...

Time is running out though and unless Microsoft addresses the issues above, they will once again lose a market they had helped create.