It's not Google vs. Microsoft, it's the "Next Unreliable Big Thing"
Beyond advertising, Software as a Service (Saas) may be
the next big opportunity for both companies. A combination of free and
fee-based services will ultimately replace software licensing as we
know it today. But not very soon. Bob
Warfield, with SmoothSpan, has a good quick analysis of why Microsoft
would want to go to a SaaS model now that Vista and Office 2007 are
released. So
far Ray Ozzie's been careful to say, "Software Plus Service."
Microsoft's acquisition of Yahoo can benefit both their advertising
push (AdCenter) and SaaS as these intersect in their Online Services
Group (MSN and MS Live). The question is what happens when you try to
merge them together? You don't want a MSN-Yahoo-Live mashup; there has
already been some user confusion between MSN and Live. We are still at
an early stage of this evolution. Neither company has a fully mature,
corporate-ready application service provider solution on the scale of a
Salesforce.com. For an enterprise customer dealing with a multi-vendor,
multi-application environment, one size does not fit all with regards
to SaaS "in the cloud." What hasn't been addressed very well is the
uptime and SLA's that corporate customers need. Just look at some
recent outages from "the cloud." We have RIM Blackberry (3 hours,
second one this year), Salesforce.com (7 hours in February, no one's immune), MS
Hotmail/MS Live (6 hours) and let's not forget the BGP injection that
brought YouTube down for 2 hours. If I'm an SMB or an enterprise
customer relying on these services for anything mission critical, I've
introduced another layer of risk to my business. Are outages going to
be the norm? Do you really want to put everything in the cloud?
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