Monday, May 01, 2006

Tech: Software as a Service - the Next Big Thing or a fizzer?

In a fit of generosity, Microsoft’s CEO Steve Ballmer suggested software prices could fall – because of a reduction in piracy!

Ah well, blame it on some over-enthusiastic subeditors, trying to put an angle into a headline. Reading the article, I don’t think that was his overriding message.

First, I think piracy is still absolutely rife with Microsoft products, particularly in China and the developing world. And I suspect that many pirates would not be using the product if they had to pay full price. Ah well, Bullmer must know something. Perhaps piracy's down in the developed world, where the money is.

Second, I don’t think Microsoft in for a hard landing anytime soon. They have a number of rivers of gold, even without their flagships of Windows, Office and SQL Server. They have a wealth of resources to draw upon when it comes to plotting the future, developing new golden rivers. For such a company, the chief concern is always going to be maintaining the quarterly profit increase, to keep their shareholders happy.

But Microsoft is aware of the broad threats into the future. They need to – and they do - scrutinise any paradigm shift that could upset their business. Two of those are software-as-a-service and open source software. I have discussed the latter before; the former seems to have been Ballmer’s real message. It was a conference on Web 2.0 – a murky term used as a catch-all for emerging web technologies, and which I’m not convinced includes SaaS, which is effectively web-based software for which you pay ongoing fees, or lose the software.

A recent article tried to infer that SaaS is a norm, or is widespread – which it’s not, really. However, as that item pointed out, we do commonly use that paradigm, even if we’re not aware of it: antivirus software can only work in that fashion. But I don’t really think SaaS, per se, represents the dawning of a new era. Unless we see common Microsoft products offered in that fashion at a drastically reduced price. And I can’t see that happening, because then Microsoft would find out just how much of its products end up as shelfware. But they probably already did that study, so expect it to be factored into the price. Myself, I don’t expect SaaS to predominate except in the areas where it’s a natural fit.

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