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Look who's got SaaS concerns
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By: Balaji Narasimhan |
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Date:
2008-12-11 |
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Place: Bangalore |
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 While Microsoft has not always got high marks for innovation, nobody can deny the fact that, when this company does wake up, it does something worthwhile. But its SaaS (software-as-a-service) push may be one of those things that, like Vista, it has not got right.
For one thing, Microsoft has been sitting pretty with its Office suite for quite some time now. In 2003, it was said that Microsoft Office was being used on 94 per cent of America's office personal computers. In 2006 a senior Microsoft executive said that Microsoft Office could hit $20 billion in sales by 2010. Last year, Microsoft's business division of which Microsoft Office forms a significant partâaccounted for $18.3 billion out of the company's $58 billion in sales and also brought in $11.9 billion out of $20.8 billion in operating profit.
So, why is Microsoft suddenly offering to take the SaaS model?
One reason is because of the recession. With companies unwilling to spend on costly servers and product upgrades, Microsoft hopes to woo users with an online service, where it can call the shots. The company learnt this when it failed to force users to upgrade from XP to Vista. But, with the SaaS model, Microsoft can decide what version of Word or Excel you use, and charge you accordingly. You don't necessarily get a say here.
But the big fear here is the issue of uptime. While Microsoft wants to do a good deed and ensure that even the free versions are better than Google Apps, it should remember that Google Apps too has had to contend with the issue of downtime, especially in March 2007, when it failed on its 99.99 per cent uptime promise in its service level agreement (SLA) for its Google Apps' Premier version.
Fighting piracy
But there could be one advantage for Microsoft in taking the SaaS route it can fight piracy that much better. In December 2008, Microsoft said that it plans to reduce the retail price of its Windows and Office products by as much as nearly 60 percent in China. The aim is to ensure that people don't go for pirated products. With SaaS, there will be no problem with piracy, and you will have no option but to pay Microsoft.
But, ultimately, piracy and downtime apart, the success of SaaS depends on how compelling Microsoft is able to make the applications it provides us. If all you get online is a stripped-down version of Word, then most users will just say thanks but no thanks and stick to the version installed on their hard drives. If, however, it gives you something that you can't get offline like advanced collaborative features then there is a good chance that the plan will succeed.
Quick take
>>Microsoft is pushing for SaaS
>>The company will have to ensure proper uptime
>>One advantage of SaaS is that it will help Microsoft fight piracy |
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