Bill Gates with his new baby

This commonality makes it much easier for Microsoft to produce software that sits on data and phone networks and lets users get at data no matter what they are using to view or download it.

The over-arching program to develop this network-based software is called .Net.

Windows XP accelerates the process of converting people to this way of life by urging them to set up a Passport account, sign up with MSN and use Microsoft software or net partners for anything they do online.

Consumer groups view these moves with suspicion.

The US Consumers Union and the Consumer Federation of America have laid out their complaints in a study which said Microsoft's strategy would force consumers into using technology and partners approved by the software company.

The US Computer and Communications Industry Association has accused Microsoft of establishing a "fiefdom" over consumers that could only be harmful.

A group of 14 cyber-liberty groups, which included the Electronic Privacy Information Centre and Junkbusters, chastised the US Government for refusing to investigate XP on anti-competitiveness grounds.

Tech talk

If all rivals did was complain Microsoft would face little real threat. However, many of its bitterest foes are developing technologies that aim to do just what Microsoft's are planning to do.

[Windows XP] will cause significant harm to both the nation's consumers and non-Microsoft-affiliated software firms and internet service vendors

US Consumers Union

Over 30 companies, including Vodafone, Sun and Sony, have created the Liberty Alliance project which is establishing a net-based identification system with much wider reach than Microsoft's Passport service.

Between them the companies in the alliance claim to represent over one billion people.

Work on the .Net initiative is also being duplicated by companies and programmers in the Open Source community. Many are working on software to support net services that are not tied to Microsoft software or partners.

Two initiatives, called Project Mono and DotGnu, are taking this work forward.

The open source attempts to rival .Net won significant backing early this month when IBM handed over $40m of software to a community of companies called Eclipse who are developing alternatives to Microsoft technologies.

The Eclipse group already has 150 member companies.

Service culture

Microsoft also faces competition from the technologies already being used to create crude web services. The main technology used to support these services before now has been the Java programming language.

Java is important because the next generation of mobile phones will adopt it to help them use net-based or multimedia services.

Microsoft is developing its own Java-like language, called C#, and it has developed a tool that lets those familiar with Java use their knowledge to create Java-like programs for .Net servers.

However, Java is widely used and supported on the web for its sensible approach to security and the flexibility it gives website creators to make small, self-contained programs.

Java got a big boost last month when software company SAP announced that it would use it in preference to Microsoft's .Net software. SAP software is used by a huge number of large corporations to manage their businesses.

Law school

But perhaps the biggest threats to Microsoft's ambitions come from legal challenges.

Back in 1994 developer Charlie Northrup, head of Global Technologies Inc, applied for a patent on a way for different software programs to interact with net-based servers.

The patent was granted in 1998 but so far Mr Northrup has not filed a complaint against Microsoft, or any other company developing web services, for infringing on his patent.

Digital rights management firm InterTrust has filed a lawsuit against Microsoft alleging that the software giant is using its patented technology in XP and other products.

InterTrust is working with companies such as Virgin, which looks after artists like Mariah Carey, on ways to stop digital works being pirated.

InterTrust is pushing for an injunction that will stop Microsoft gradually expanding its reach via .Net, XP and its partners.