It’s been three years almost since Windows Live was launched back in November of 2005, and the road from there to here has been anything but smooth.  Almost from the beginning, no one could seem to answer the simple question “what is Windows Live?”.  Rather than usher in a new era of live services, Windows Live instead cast doubt on the future of MSN and seemed to be going off in all directions at once.  At the same time, a little incubation project called Start.com became Live.com, MSN Search became an in-house project, which became Windows Live Search, which became Live Search.  MSN Hotmail became Windows Live Mail, and then Windows Live Mail – desktop appeared, and Windows Live Mail became Windows Live Hotmail.  No one could seemingly figure out what to call maps.  Was it Live Maps? Live Search Maps? Live Local?  At times, in various places on the live.com domain, it was all three.

And yet for the past year and a half, with a new management in place, and new organizational connections with Windows, the utter mess that had plagued Windows Live was slowly but surely being cleaned up.  Some services were shut down (Expo, Favorites), others were relegated back to MSN (Live Search), and still others were just kind of forgotten (remember the rogue little service called Windows Live Barcode?).  Now, with the advent of Wave 3, for the first time, Windows Live should have a coherent structure and a coherent face.

And done right, Windows Live is and can be a compelling set of services.  No one else offers anything so complete, with common storage, common contacts, a common interface, and a common user experience on the desktop or online, all accessed by a single sign-on.  And no one else will offer such a complete range of products, for both the web and desktop: Mail, Messenger, Calendar, Events and Groups, Photos and Movie Maker, Spaces, and storage through SkyDrive, all managed by a single sign on and a single contact list, with granular permission controls.

Add Live Mesh into the mix, where all of these services are synchronized across your devices and the promise of Windows Live, and software plus services, becomes even more compelling.  For the first time in three years, we’re about to see the promise of what Windows Live should have been all along (and granted, three years ago that wouldn’t have been possible, even with a better message).

But the problem with Windows Live has always been more than the technology.  Microsoft has an image problem, and there is a section of the tech-savvy population that would do almost anything rather than use Windows, or Microsoft.  Soon, we hear, Microsoft will attempt to work on that, with $300 million in advertising about to be spent on image. 

While it would be foolish to expect an image that has developed over years of poor decisions, under-handed and monopolistic practices, and just plain bad management to change overnight, there may be no better time than the present to begin to move Microsoft into an era of software plus services.  Apple, who has always seemed to have a golden touch, has been beset recently with a number of glitches and gaffes, and the shine may be wearing off the apple a bit. 

Google faces its own challenges, and has yet to find a product other than Adsense that makes any money.  And of course the early adopters are the ones who are most likely to steer clear of Microsoft, and the most vocal.  If next year Microsoft cleans up its image, puts a better face on Windows 7, and offers some great choices to users of Windows Live all easily accessible from Windows 7, will the clamor to move away from Microsoft be as strong?

Of course image comes from much more than marketing.  After “the Scoble years”, where we caught a glimpse of what it meant to be Microsoft, it’s back to business as usual, and the only speak is corporate-speak.  The only thing Microsoft employees seem to blog about anymore is their vacations, and that’s telling.  There are exceptions, of course, but after the $300 million runs out, we’ll be right back with the same old monolith.  Microsoft simply can’t change its image unless it changes its culture, and so far there isn’t much indication of that.

A big question remaining for Windows Live is whether users really want or need a single all encompassing service, handled by a single and all encompassing provider.  The truth is it’s not that hard to take the best of a number of different services and mash them up together,  and the truth is that Windows Live is not the best in breed in a number of the services it offers, including the current state of photo sharing, blogging and even mail, if you’re a GMail fan.

Open ID, while it hasn’t caught on yet, may provide similar functions to a single sign-on, and any new service without an API isn’t worth launching.  While the new management has worked hard to get the “trains to run on time”, the truth is that while the Windows Live train was off the tracks the rest of the world may have moved on to automobiles.  Why wait for the next train (especially one that refuses to publish a timetable) when you can just get in the car and go?

We expect Windows Live to provide a better set of services with Wave 3 than it has up to this point, by far.  We’re excited about what we’re hearing, glad to hear that the last three years seems will soon be behind us.  However Microsoft is still too late to market, too insulated from the world, and too short on features to really compete in an agile, lightweight, fast-paced world.  We hope that having cleaned up the mess, the work can really begin.