The move comes as people increasingly use writing, accounting, email and other programs online instead of buying packaged software and installing it on their own machines.<\/p>\n
Microsoft’s packaged software has long been the foundation of the US firm’s product line but is threatened by a “software as a service” (SaaS) trend being capitalized on by Google, Oracle and SalesForce.com.<\/p>\n
The Microsoft Online Services suite announcement made by chairman Bill Gates was touted as a “significant step” toward expanding the company’s “software plus services” strategy.<\/p>\n
“The combination of software plus services gives customers advanced choice and flexibility in how they access and manage software,” Gates said in a statement.<\/p>\n
“In the future, customers and partners should expect to see this kind of choice and flexibility for all of Microsoft’s software and server products.”<\/p>\n
Businesses of all sizes will be able to subscribe to use software online or combine SaaS with Microsoft programs installed on their computers, Gates said.<\/p>\n
Microsoft invites US firms to register online at www.mosbeta.com to be part of a beta test of the new services, which it expects to make available publicly in the second half of this year.<\/p>\n
New online services being tested include Exchange Server and Office SharePoint Server software handling tasks such as email, schedule calendars and online conferencing.<\/p>\n
Microsoft realized a decade ago that the market was heading to SaaS but “it has taken them a while to turn the boat,” said Silicon Valley analyst Rob Enderle of Enderle Group.<\/p>\n
“You are going to see them get a lot more aggressive treating software as a service,” Enderle said.<\/p>\n
“The trick is to move to SaaS at a rate that doesn’t cannibalize their revenue streams prematurely. A company like Google can go hell-bent for leather and if their products aren’t ready, it doesn’t hurt them.”<\/p>\n
A benefit of SaaS is that it lets providers connect better with the people actually using software programs instead of network administrators or technical departments at firms.<\/p>\n
When providing software as a service, companies hosting programs tend to updating, security and trouble shooting.<\/p>\n
A key factor limiting the popularity of SaaS is reliability of Internet connections relied on to get to the software.<\/p>\n
On-demand computing is sometimes referred to as “in the cloud” because of the perception that the work is done in the ether of the Internet.<\/p>\n
“SaaS reflects where the market is going,” Enderle said. “What is holding it back right now is as much infrastructure as it is an unwillingness to change by people.”<\/p>\n
Internet network reliability is improving and the roll out of WiMAX wireless broadband access technology is expected to boost the appeal of SaaS, according to the analyst.<\/p>\n
Enderle referred to SalesForce.com as a “poster child” for SaaS. The US company has been growing apace since it was founded in 1999 by former Oracle executive Marc Benioff. The firm has already formed a partnership with Google.<\/p>\n
Last week SalesForce reported its revenues soared to 216.9 million dollars in the fiscal quarter ending January 31, a 50 percent increase from the same period in 2007.<\/p>\n
“Our fourth quarter and full-year results show that businesses are selecting the Force.com Platform-as-a-Service and cloud computing over failed client-server alternatives,” said SalesForce chief executive Marc Benioff.<\/p>\n
“There’s only one way to describe both the consolidation of the industry and the growing number of companies choosing innovation, not infrastructure: The End of Software.”<\/p>\n
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