SaaS vs S+S

Redmond, Wash-- Kevin Turner, chief operating officer at Microsoft, complains that there's too much hype about software as a service (SaaS), likening it to other technology trends that target IT, but fizzle out or do not achieve their hyped expectations. "We've seen that movie before," he grumbles.  

However, in a day-long briefing here on SaaS, or software + services (S+S) in local parlance, Tim O'Brien, senior director of platform strategy, acknowledged, "This business is huge," one Microsoft cannot ignore. And even Turner says "We're going to lead in this area. We don't even think of not [leading]."

Still, if you listen carefully to company executives, they want to do more than change an established acronym (SaaS) for a new one (S+S). They want to radically alter the way IT acquires, deploys and manages software.

Naturally, Microsoft expects you to license software for clients and servers and run them on your premises until the end of time (assuming you upgrade regularly, of course). But the company expects you'll also subscribe to some applications, even applications you already license for on-premise use, to meet staffing and deployment needs. Plus, you'll have the choice of subscribing directly through Microsoft, or maybe one of its many partners, who may host the applications themselves, or may have Microsoft do the actual hosting, while the partner holds your hand.

This mish-mash of app deployment means the software has to be completely compatible whether run as a service or as licensed, on-premise code. This could be an issue when on-premise and subscribed versions of software are not identical. The S+S approach also has to be managed efficiently, and with no finger-pointing. The first time Microsoft or one its hosting partners tries to shrug off responsibility for a problem between on-premise or service software, S+S crashes and burns.

Whether Microsoft becomes a dominant player in this market remains to be seen. So far, it has not done gangbuster business in the CRM hosted market, though, to be fair, its first true multi-tenant version of Dynamics CRM product just hit the virtual streets yesterday. Certainly by choosing Exchange as a leading candidate for S+S, Microsoft is playing to its strengths because Exchange rules the market of e-mail servers and already has been proven in a hosted environment. And O'Brien points to the company's multi-billion-dollar investment in sprawling data centers around the globe, which will house S+S apps, as proof of Microsoft's commitment. Few companies are capable of competing at that level, he says.

Well, at least one, Google, is cranking out data centers at least as fast, if not faster than Microsoft. O'Brien acknowledges Google's single-mindedness in this area as well as its high-profile position in the SaaS market. But he also notes something else. "Google is quietly pushing software down to the client," he observes.

Perhaps like Microsoft, Google doesn't see a SaaS future for IT, but an S+S one.