09.12.08
Why Microsoft has to do SaaS itself
SaaS (Software as a Server) and S+S (Software plus Services) are key elements to Microsoft’s current strategy. It’s important to remember here that beneath everything else that goes on, Microsoft is a software house and makes its money from software licenses. But how effective have they been at delivering their applications in a SaaS or S+S model? The answer is, unfortunately, not very.
Microsoft have poured extraordinary amounts of marketing dollars into positioning Exchange Server as an SaaS platform and the result has been that the majority of hosters who have implemented the Hosted Messaging and Collaboration (HMC) solution - this incorporates the delivery of Exchange Server in a stuctured architecture - have seen less than stellar returns on their investments. The reasons on the whole for this are that the type of customer which the majority of hosters have see email, even ‘business class’ email, as a commodity rather than a value service and as a result are reluctant to pay for it. Even the much vaunted mobility eneblement is not a key decision point as the majority of email enabled mobile devices support IMAP and when paired with an IMAP client at the desktop and a web-mail interface at the server provide email anywhere.
In the case of Exchange its value lies in its integration with and support of larger solutions as a value-add, not as a product itself.
Microsoft has seen the relative failure of this product and solution in the market sector serviced by the smaller hosters and, in an effort to see off the ever-growing threat of Google’s Apps suite, have done it themselves. The positioning of the Live solutions are questionable and have caused some considerable consternation amongst the hosters who have implemented HMC based on the guidance and advice of Microsoft’s marketing engine. But the rationale is clear, Microsoft’s solutions and applications MUST be available via the internet. The problems of adoption however are not even the most serious ones, they lie within the organisation itself.
There are organisations, business units and product groups within Microsoft who have very clearly defined targets in terms of market share and revenue etc and also in terms of where that revenue comes from.
So imagine a scenario whereby an opportunity exists to exploit the cresting interest in SaaS and S+S but the Microsoft product group for that particular application have no revenue targets from hosted solutions, only from ‘traditional’ sales. They are positioned, in the interests of their own internal sucess, to dismiss the hosted solutions and the SaaS/S+S model and to actively persuade their partners that the traditional on-premise implementations are better.
From the perspectives of the product group this makes sense of course, why would they spend any money on promoting a solution which effectively erodes their ability to deliver against their targets. But this position is dramitcally undermined when seen from any other perspective. The product is, after all, the same so why should it matter how it is consumed?
It is especially frustrating for the Microsoft partners who are pressing for the adoption of the applications under the S+S model to be told “We think it’s a great idea but we don’t have budget to support that this year.” THIS YEAR! This is the internet we are talking about here… in a years time we’ll have all moved on and done something more interesting, yet we see the high level marketing and listen to the strategy presentations where Microsoft is all about flexible delivery, SaaS and S+S and partnerships.
So here’s the thing, I have a program all laid out just waiting for someone to fund which will bring together hosters, partners and the various pieces within Microsoft to establish a solution for this. It’s not rocket science it’s just common sense, and who knows we may even be able to deliver products out to the customers at the end of it!
