R E L A T E D C O N T E N T

Microsoft inches towards a SaaS future

Gates unveils online Exchange and SharePoint today

IT Week Staff, IT Week 03 Mar 2008

Microsoft is expanding its range of online services aimed at the enterprise. Company chairman Bill Gates will today unveil online versions of its Exchange and SharePoint applications, which will be generally available later this year.

The move comes as momentum behind the software-as-a-service (SaaS) delivery model is building. SaaS has made huge inroads into enterprise application markets: SaaS pioneer Salesforce.com has redefined the customer relationship management sector.

And the threat SaaS presents to Microsoft's core business could hardly be greater. The company continues to drive massive revenues from customers that install its software on their own servers. Should those customers opt to pay monthly subscriptions for similar applications delivered over the internet, Microsoft's revenues could drop sharply.

Through its Microsoft Online Services, the software leviathan is aiming to manage the transition to a SaaS model without cannibalising its core business. "With Microsoft Online Services, businesses can deploy software as a subscription service, from servers they manage on-site, or a combination of the two, depending on their specific needs," said Gates in a statement.

The first beta versions of its online email, calendar, contacts and web conferencing services will be available to Microsoft's US customers from today. Generally available versions are expected in the second half of this year.

But managing that transition will prove challenging, warned Gartner analyst Matt Cain. "Providing large-scale SaaS services for business requires significant expertise in high availability, security, multi-tenant architectures, network topologies and problem resolution. Furthermore, Microsoft is retrofitting its existing software to the multi-tenant server model. It won't be until the next version of Exchange (due in 2011) that its core products are better architected to run in a multi-tenant SaaS model," he said.

Meanwhile, arch rival Google has been offering an enterprise on-demand email service for some time, albeit with limited success. Last week Google also unveiled its plans to offer a SaaS rival to SharePoint.

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