Foley on Microsoft

Software+Services Madness

If Microsoft can't even explain its SaaS strategy, how can it expect anyone to buy into it?

Microsoft has been desperately seeking ways to differentiate itself from the rest of the Software as a Service (SaaS) pack. Even though Microsoft is charging full steam ahead into the software services realm, the Microsofties don't want to be seen as Johnny-come-lately to a world already dominated by Google, eBay and Salesforce.com.

That's where Microsoft's "Software+Services" (S+S) strategy comes into play. S+S, according to the Softies, is a superset of SaaS. It's SaaS done right.

There's only one problem: No one at Microsoft or anyone who watches it seems to be able to succinctly explain S+S. Microsoft tried to get the message out to market researchers and analysts at the end of February, but no one with whom I spoke seemed to understand the subtleties of Redmond's message.

I'm going to give it a whirl. After chatting with Microsoft Director of Platform Strategy Tim O'Brien, I feel ready to try to decipher S+S for the masses.

Microsoft's competitors -- like Adobe with Apollo and Salesforce.com with its Salesforce.com Offline Edition client app -- are gradually acknowledging that an all-services approach leaves many business customers cold, says O'Brien. They want offline capabilities, even if they're relying on SaaS applications.

For business customers, "network dependency is a nonstarter when it comes to line-of-business applications," says O'Brien. Consequently, everyone's trying to figure out how best to move to the middle. O'Brien says Microsoft's stance is "anyone can get reach."

"The real battle is on the client," O'Brien posits, and desktop software has always been Microsoft's strong suit. However, Microsoft is no slouch on the Internet-based services side either, O'Brien says. The company doesn't get enough credit for its Internet savvy, which it has demonstrated by running highly scalable Hotmail, Xbox Live and other consumer-side services.

O'Brien itemizes current and future Microsoft services into three buckets: Foundation services, like Microsoft's long-rumored LiveDrive cloud-based storage; Attached services, such as disaster recovery, anti-spam and Windows Defender; and Finished services, like Windows Live and Office Live.

Services companies like Google and Salesforce.com often underestimate the types of back-end infrastructure that are needed to properly field enterprise-ready software, he explains.

What you need in order to do it all, O'Brien says, is "a platform." That doesn't mean .NET or some kind of development platform, which is what Microsoft usually means when it uses the "P" word. In the S+S case, "a platform" is synonymous with vision (I think). These are the elements of Microsoft's S+S platform, according to O'Brien:

• Experience: As in the interface. Depending on the access point (whether a PC, browser or mobile device), you get a different look/ feel/interaction.

• Delivery vehicle: There are several, including hosted on premise, hosted in the cloud, 100 percent shrink-wrapped software, try-before-you-buy, pay-as-you-go and managed services, like Microsoft's "Energizer" desktop-management offering.

• Federation: How do users validate/ authenticate/manage when one vendor doesn't own all the pieces? The pie-in-the-sky answer is the identity metasystem. S+S will provide some elements of this system (via Microsoft CardSpace, Active Directory and Live ID).

• Composition: All of the bits aren't located in one place in the S+S world. Composite applications and mashups are the new "it" apps.

• Monetization: Online ads aren't the only way to make software services pay for themselves. Subscriptions, pay as you go, traditional shrink-wrap plus maintenance and other to-be-determined mechanisms will also fuel S+S.

As usual, Microsoft believes it can be all things to all people. The S+S arena is just another example of that belief.

What do you believe? Is Microsoft well-positioned to take on Google, Salesforce.com and other services competitors? Or is Microsoft's desktop legacy holding the company back from being able to move ahead in the brave new SaaS/S+S world?

About the Author

Mary Jo Foley is editor of the ZDNet "All About Microsoft" blog and has been covering Microsoft for about two decades. She has a new book out, Microsoft 2.0 (John Wiley & Sons, May 2008), about what's next for Microsoft in the post-Gates era.

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