"Software as a service ... delivered over the Internet"
Microsoft .NET is about "web services."
Microsoft views the current Internet model as equivalent to a 1960s mainframe model of computing.
The Web presents a centralized data model, in which data is pulled from one database or data center,
and presented in a read-only dumb terminal fashion to the end user, who cannot edit it or annotate it.
The many benefits of the PC revolution, they say, have been lost on the Internet.
Web services, they say, will bring power back to the user. End users will have full control over their content,
with integrated, collaborative services that share data and work together through a common interface API.
All securely, of course.
.NET is to be a component based solution. Using technology descended from COM, developers create services that are hosted on the server side. In a "loosely-coupled" model, these services can discover each other via UDDI and then interact using protocols based on SOAP. Services can live on different servers, or totally different web sites. Microsoft contrasts this model to the tightly coupled J2EE model of n-tier web development, where all of the tiers must be hosted on the same web site.
In 2001, Microsoft reached an agreement with eBay to implement a set of .NET services for the famous e-tailer.
Another component of the .NET vision is integrating multiple devices. Microsoft envisions a world where palmtop and mobile devices use .NET as the data repository which they share and synch up from as needed.
In 2002, Sun Microsystems announced the SunOne program to counter .NET.
See also .NET. For Microsoft's official story, see msdn.microsoft.com/net.