Microsoft Online Services: SaaS-y, Sort Of

Take this week's launch of Exchange Online and SharePoint Online for the cloud. In theory, this should be simple. Customers sign up for hosted Exchange and SharePoint, pay a monthly fee, open a browser and start working, right? Isn't that more or less what SaaS is supposed to be? Well, not exactly. Check out this Microsoft quote from this story:

"'I don't want to make it sound like someone signed onto the Web site, swiped a credit card, and went home,' Chris Capossela, senior VP of Microsoft's information worker product management group, said in an interview."

Uh...why not? Why doesn't it work that way? Granted, technology rarely works exactly the way it promises to, but it seems to us that the point of SaaS is to be low-cost (or, more specifically, have a predictable cost) and easy to manage. Granted, SharePoint Online and Exchange Online probably accomplish that to a greater extent than their traditional, on-premises parents do, but Exchange, for example, still has a client component (Outlook, of course) installed on PCs, and apparently there's some management to be done in-house with the SaaS versions of both applications. (Partners, take note -- there's your in, if customers buy into Microsoft as a SaaS company.)

Of course, we understand several things here: 1) These are complex products -- especially SharePoint -- that do complex things, and it's perhaps a bit naïve to think that companies will be able to just flick a switch and start using them. 2) Almost everybody who's investing in Online Services (the name of the combined package) has some Microsoft infrastructure already and will have to integrate the hosted with the on-premises.

But then there's 3) Microsoft likely doesn't want to totally cannibalize its traditional SharePoint and Exchange businesses, so it's not going to make Online Services too cheap or too easy to manage. In fact, in the case of SharePoint, it's not even putting all of the features of traditional SharePoint into SharePoint online -- not even all that many of them, in fact.

All of this leads us to the conclusion that Software plus Services, Microsoft's sort of proprietary name for SaaS, is really just Redmond's attempt to make sure that companies still need to invest in some of the more money-spinning parts of Microsoft's infrastructure. Microsoft has to have a SaaS offering -- and it's putting quite a bit of effort into this one, as well as into Azure -- but don't expect any Salesforce.com-style, "No Software" marketing lines coming out of Redmond any time soon. Online Services still doesn't represent full-featured, 100-percent cloud applications. Will it ever? Can it ever? We kind of hoped that we'd know by now...but we don't.

What's your take on Microsoft's SaaS vision? Are you looking for a more pure SaaS play or does S+S make sense? Sound off at [email protected].

Posted by Lee Pender on November 18, 2008