SmoothSpan Blog

For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Microsoft SaaS News Looks Disappointing

Posted by Bob Warfield on March 3, 2008

So far it looks to be just Exchange and SharePoint.  Arrington is calling it disappointing and Nick Carr hasn’t commented at all.

I continue to think it makes a lot of sense sometime soon for Microsoft to announce more SaaS, but as I also cautioned, I won’t be surprised if it drags out quite a long time.  In particular I wonder if the investment community is ready for new shock waves after the Yahoo ordeal.  It could be that Microsoft is thinking discretion is the better part of valor until that saga is done.

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Phil Wainewright says the issue is concerns over profitability with the SaaS model.  As have said, introducing SaaS at the right point in Microsoft’s lengthy upgrade cycle, after most have upgraded, creates a window to minimize this effect.  But, I can’t see investors letting them do it.  As Phil says, “Office in the cloud? Steve Ballmer will lose his job before that happens.”  Too bad for Microsoft!

7 Responses to “Microsoft SaaS News Looks Disappointing”

  1. […] on Smoothspan, Bob isn’t smug but reminds us that MS and SaaS won’t be a quick moving relationship; […]

  2. I think people underestimate two important and related factors: Ray Ozzie, and a carrier grade rewrite.

    I was fortunate to work with Ray Ozzie at Lotus many years ago. At one time, there were discussions with AT&T about their use of Notes, but they insisted that it be ‘carrier-grade’. When asked how they defined that, they essentially said that security, reliability, and recoverability all had to be near perfect. For example, they required a catalog of every possible failure of the app, how to recover from that crash, and steps to take to prevent the same bug from ever appearing again. Clearly, carrier grade had to be built-in from the first day that anyone started to code. At the time, no desktop software met the test.

    Later, at Groove, Ray had the chance to sort of follow Frederick Brook’s advice and do it all over again. MS originally invested $50million in Groove, which is a lot of money, and later bought the company. Now Ray is CTO of MS. Ray has always been all about networked apps, and there is no lack of awareness about the business issues you talk about, but the perceived delay may have more to do with achieving carrier-grade robustness before they invite the entire world of PC owners to connect and start typing.

    Thanks!
    steveh

  3. smoothspan said

    Steve, that’s also a possibility, although “carrier grade” has all too often been an excuse for over engineering at many companies. Be that as it may, they are very late to the party. Ozzie may “get” web software, but OTOH, Notes had a cult following and didn’t ultimately become very mainstream. Even sleepy SAP is further along with their SaaS offering.

    Cheers,

    BW

  4. Did you see Ray Ozzie’s announcement of Microsoft’s cloud?

  5. ajaydawar said

    I doubt that MS will get SaaS. SaaS is very different than putting a much of servers in the data center and managing teh software behind the scenes. True SaaS is about cloud computing and rethinking everything – from the way software is conceived, “product-managed”, tested, released, considered, tried, bought, marketed, priced, sold, serviced, and shared by users over the cloud. Great examples are everywhere like Google’s grid computing – MS engineers by and large don’t think of writing software that will run on a grid. Salesforce.com is really good at getting feedback from user community and sharing it with users. The list goes on but the point is that it will be hard for MS to change their DNA.

  6. […] enough, but there is even more going on around this pairing.  Microsoft has chosen to make Exchange and Sharepoint the initial centerpieces for its SaaS/Cloud Com….  Yet web mail makes for a painfully exposed flank that could be attacked.  Picking up Yahoo […]

  7. darrellross said

    Bob,

    This “lack” of development from MSFT is disappointing. There are a couple of other topics that haven’t been discussed:

    1. A free version of Office can be ad-supported. MSFT has the Atlas/aQuantive platform to target ads, similar to how Google leverages their Adwords platform for GMail.

    2. A ad-supported free version of Office for the masses will offset the billions of $$ lost due to piracy and the millions $$ spent on legal compliance.

    3. Enterprises can elect to pay for their no-ad versions and have their data stored internally versus on the Cloud.

    4. Think of all the landfills that won’t have MSFT software boxes, clamshells, and paper inserts. Hmmm…..SaaS to power the Green Revolution?

    5. To make this happen, offline Silverlight is a must!

    I expand upon these topics at: http://www.enablus.com/blog/2008/03/are-saas-and-silverlight-keys-to.html

    Best,

    Darrell

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