Microsoft Online Services extends SaaS to SMB users

At the Microsoft Office SharePoint Conference on Monday, Microsoft Chairman Bill Gates unveiled plans to provide a software-as-a-service offering not just to the large enterprises already eligible for such a service from Microsoft, but to companies of all sizes.

Through the new Microsoft Online Services, business with less than 5,000 employees will be able to subsribe to Internet-based applications from Microsoft and its partners instead of buying hardware servers and software licenses. Initially, the company will offer subscription-based applications around e-mail and its SharePoint teamware.

Microsoft has already provided similar services for enterprises with more than 5,000 employees.

About eight partners, including high profile names such as Unisys and British Telecom, have already announced that they will resell, customize, and provide managed services around Microsoft Online Services.

US-based customers can register to take part in a limited beta of the new service at http://www.mosbeta.com.

As some analysts see it, the SaaS model is particularly well suited to SMBs.

"This is because it offers fixed monthly fees, freedom from most operational management, elimination of upgrade responsibilities, and in some cases, lower costs," according to Matthew W. Cain, an analyst at Gartner.

Cain also pointed out that a number of other vendors have been moving into SaaS lately, too, including Yahoo with its Zimbra acquisition, Google with its Postini buy, and surprisingly, Dell.

"We believe that 20 percent of enterprise e-mail seats will us a Saas provisioning model by 2012, compared with 1 percent in 2007," said Cain, in a recent Gartner research note.