In early March, during an annual conference in Seattle, Microsoft
announced it was launching Microsoft
Office SharePoint Online. While the idea was to provide a lightweight version
of SharePoint as a hosted offering, analysts say the product has been presented
in a way to avoid cannibalizing Microsoft's bread-and-butter installed software
product, Office.

SharePoint, which started off as a document management system back in 2003,
also now includes
Web 2.0 features such as blogs, wikis and social networks, which were added
in 2007. While users access SharePoint through a Web-browser, companies typically
host the SharePoint server software themselves, onpremise.

You won't find Microsoft executives calling SharePoint Online a SaaS (software
as a service) offering. In fact, according to analysts, that phrase doesn't
fit into Microsoft's lexicon of technology terms. Instead, it's called "software
plus services." At its core, software plus services essentially means that
Microsoft will provide online portals and will host the data, but in order to
manipulate the files that reside there, you'll need the Microsoft
Office suite installed on your computer.

It's a similar idea to its Office Live product, currently in public beta, which
also requires users to have their versions of Office on their computer in order
to work on files.

Both Office Live and Microsoft Office SharePoint Online differ from fully Web-based,
SaaS offerings like those from Zoho and Google
Apps, which allow users to author, edit and share documents all online.

According to Rob Curry, director of Microsoft SharePoint, software plus services
means letting businesses decide what data they are willing to let a vendor host
and what information must never leave the company's walls.

"It's not all or nothing," Curry explains. "There is certain
information they want to keep offsite and certain information they want to keep
onsite for compliance reasons."

According to Rob Koplowitz, a principal analyst with Forrester, that message
will resonate with CIOs who have had difficulty envisioning putting all their
data into "the cloud," but would be happy too offload less sensitive
stuff that takes up server space and costs money to maintain. Sensitive financial
data, for example, might not be a prime candidate for storage in the cloud.

"They can see letting certain types of users accessing certain types of
data from a cloud version, and others using an on premise version," Koplowitz
says.

At the SharePoint conference in March, Microsoft
Chairman Bill Gates defended the software plus services strategy in a question
and answer period, dismissing Google Apps tools as too lightweight for serious
business users. "They really don't have the richness and responsiveness,"
Gates noted, "and you can see that relative to the success they've had
there."

Few would argue with Gates that Office applications such as Word and Excel
have more bells and whistles than Google Docs & Spreadsheets. The question
is, what percentage of corporate end-users actually utilize all of them?

It depends on whom you ask. SaaS vendors and advocates claim that percentage
is pretty low. According to a survey
of 420 large and small companies taken last month by SaaS consultants at Thinkstrategies
and Triactive, nearly 99 percent of companies reported that Office was installed
in 99 percent of their corporate PCs. At the 20 largest companies sampled, only
26 percent of the features in Office were being used and that use centered around
basic functions in Word, Excel and PowerPoint.

"The vast majority of companies have over-provisioned Office," says
Jeffrey Kaplan, managing director of Thinkstrategies, a consulting firm that
advises companies on how to use SaaS. "They're either not really using
it at all, or they're using a version that's far more than what they need."

That would seem to render silly any cloud strategy holding onto Office as a
primary tool. Tom Austin, a Gartner analyst, says he thinks software plus services
might eventually be ditched as a priority for Microsoft in lieu of Mesh,
a program that allows people to use to Web to get a unified view of their various
devices and applications.

"I'm pretty impressed, conceptually, with what Ray Ozzie (Microsoft's
Chief Software Architect) is trying to do with Mesh," Austin said via e-mail.
"To me, Mesh replaces 'software plus services.' Software plus services
was retrograde (looking backward) while mesh is forward looking. Software plus
services was about defending the old revenue stream while mesh is about defining
a new (and valuable) value proposition."

Austin also made one other prediction: "Software plus services will fall
into disuse in the next several months."

» posted by abennett

CIO

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