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Microsoft announced Monday that it is expanding the range of
business software it makes available as a service on the Internet.
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.
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.
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.
"The combination of software plus services
gives customers advanced choice and flexibility in how they access
and manage software," Gates said in a statement.
"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."
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.
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.
New online services being tested include
Exchange Server and Office SharePoint Server software handling tasks
such as email, schedule calendars and online conferencing.
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.
"You are going to see them get a lot more
aggressive treating software as a service," Enderle said.
"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."
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.
When providing software as a service, companies
hosting programs tend to updating, security and trouble shooting.
A key factor limiting the popularity of SaaS is
reliability of Internet connections relied on to get to the
software.
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.
"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."
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.
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.
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.
"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.
"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."
-- AFP
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