April 18th, 2007

Ballmer: SaaS to have a major impact on businesses, not just consumers

Microsoft is expecting Web 2.0 and software-as-a-service (SaaS) to "have as profound an impact on the business market as on the consumer market," said Microsoft CEO Steve Ballmer.

Ballmer addressed a group of 80 or so Microsoft-identified "IT Pro community leaders" during a day-long Townhall Event on the Redmond campus on April 17. During a Q&A with attendees, Ballmer reflected quite a bit on Microsoft's SaaS strategy — seldom using the company's preferred "Software Plus Services" terminology.

Ballmer said it's only a matter of time — be it one, three or ten years — until SaaS "happens." Watch for Microsoft to roll out its own cloud-based deliverables "over the course of the next few years," Ballmer added.

"SaaS starts with a new platform that nobody has today," Ballmer said — "the platform in the cloud."

Microsoft will be taking its "experiences" and applications and "projecting them into the SaaS world," Ballmer said. He said Microsoft is thinking in terms of "what would a PC look like if it were PC Live" in devising its Windows Live, Office Live, Live Search, CRM Live and ERP Live product sets.

When it comes to thinking about the future, Some companies buy technologies, Ballmer said. Some are more centered around engineering/building their own solutions. And some are more incubation-centric, Ballmer said. Microsoft is looking to combine all three cultures as its business model diversifies from one heavily based on packaged software to one that addresses the software-services continuum.

Ballmer mentioned the so-called corporate "quests" that Microsoft is using internally as a long-term planning tool. Ballmer said there are 70 areas that the Microsoft executive team has identified as important to the company's future. The 70 quests are subdivided into six buckets, he said: productivity, entertainment, business works, IT in the datacenter, software development and "the future of Windows," meaning both the user interface and the computational computing models enabled by the platform.

Each of the company's quests will be applied to different audienes in different ways, Ballmer said. He told the IT Pro Townhall attendees that Microsoft is grouping customers into two sweeping categories — those with IT departments and those relying on Yahoo, Microsoft and other hosted-services providers as their IT departments in the cloud.

During Q&A with Townhall attendees, Ballmer said that Microsoft is not planning to introduce any kind of new concurrent-licensing models to reflect the company's increasing moves into the SaaS field.

"SaaS will having diffrent pricing models" depending on the associated business model, he said. But "we don't forsee any major new work on our licensing as a result of SaaS."

Ballmer also addressed another attendee's question about Windows Vista's adoption rate. Ballmer said that the adoption rate of Vista has not been slow. Vista is gaining adoption at about the same speed as past Windows releases, he said. He said Citigroup has committed to rolling out 500,000 Vista seats in th enext 13 to 14 months.