About the time I was interviewing with Microsoft, Bill Gates’s memo started circulating in the press. Short version: Microsoft needed to continue its leadership in the transition to what Gates calls a services model on the web.

Naturally, this was one of the first things I asked about at Microsoft with the Visual Studio group. Everyone got this memo. What does it mean to you? How will Microsoft’s services model impact VS?

The response was somewhat dismissive, and I can’t say that I blame them. At the time, I thought that programming on the web didn’t really make sense. For that matter, does it really make sense to do many of the normal “Desktop” processes on the Web?

Maybe it does.

Writely is a web word processor that allows you to store and edit documents online. For each document, you can even specify collaborators, so multiple people can edit the document at once (it’d be interesting to see this multi-person editing in a clear way like SubEthaEdit does - but the principle is very cool).

Now here’s where it gets exciting. A couple of days ago, Google finalized their purchase of Upstartle, the company that created Writely. The very brief article in the New York Times said that this move “signals the intention of Google to expand its reach into Microsoft products.” As if competing directly with MSN search hadn’t signaled that already.

Just check out Writely’s interface. Something about it opened my eyes to the possibility of more applications existing on the web - even, perhaps, Visual Studio. Something about the Web necessitates greater simplicity - with that, it seems, comes the potential for greater usability and greater product success.

All this seems to be pushing toward the notion of the Web OS, discussed in detail here. The next few years will be the critical time, when the OS giants of old can either make a hardcore transition in how they run things, or get left behind. What an exciting time to be thrown into the middle of all this.