Microsoft released on Monday a test version of its new Silverlight online media platform, a rival to Adobe's dominant Flash player.
At Microsoft's MIX 07 conference for Web developers and designers, the company said it will also offer a companion service that allows streaming video for Silverlight.
Ray Ozzie, Microsoft's chief software architect, said in a keynote speech that the company will open up its database infrastructure to Web developers who want to store their video on Microsoft's servers and storage systems.
The company said it will store and host up to 4 gigabytes of video for Web developers.
Microsoft's announcements at MIX 07 highlight its "software plus services," a strategy aimed at enhancing its desktop software with services delivered over the Internet.
The company further announced it will begin on Monday shipping Microsoft Expression Studio, a suite of graphic design and animation tool software that allows designers to create applications for both the Web and Windows operating system.
Expression Studio and Silverlight constitute a shot across the bow of Adobe, which has dominated the graphics and designs tools software market with its Creative Studios line and Flash player.
Using Silverlight, Microsoft aims to appeal to content companies with lower costs for media delivery, because it integrates with existing Web technology. It is also compatible with the Windows Media format.
The company also said it will allow developers to write applications for Silverlight using its .NET framework, which is a common set of tools to create applications for Windows operating systems.
Microsoft Silverlight works on most Web browsers including Apple 's Safari and Mozilla's FireFox. Microsoft said it plans to make Silverlight widely available this summer.