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Microsoft Begins Its Radical Shift to Software as a Service

2007; American Bankers Association; Volume: 99; Issue: 12 Linguagem: Inglês

0194-5947

Bill Orr,

Big Data and Business Intelligence

Tens of millions of people around the world know Microsoft mainly as a PC desktop from which they manage myriad functions of their personal and business lives. In its fiscal year ended Last summer, the company posted record revenues of $51 billion, up 15% from 2000. So why should software's world champ even think of changing a winning strategy? As CEO Steve Ballmer put it, Microsoft is moving towards the world of software plus services, a model that will bring the best of the desktop, the best of the Web, the best of the enterprise, and the best of devices together. Ballmer expects that within a decade nearly all of the company's applications will migrate to an online platform, according to a New York Times article by John Markoff. Will software plus services fly? Adam Honore, senior analyst at Aite Group, spent two hours with Microsoft technical people and still has doubts. Microsoft is playing catchup and has a Long way to go, he says. They're putting out a convoluted message that won't work for applications such as portfolio management in capital markets, says Honore. But the payoff of SaaS (software as a service) can be a big one if it turns out to be a viable way of replacing obsolete Legacy systems, he adds. Elizabeth Herbert, senior analyst at Forrester, on the other hand, says that Microsoft is on the right track. Offering both products and services can be a big plus for IT, she says. With today's standalone in-house applications, IT managers spend too much time in administration. SaaS lets them concentrate on corporate vision and strategies, with a staff mostly devoted to light customizations. Those are applications with many common elements; e.g. customer relationship management (sales, customer history, etc.), human resources (recruiting, hiring, records, etc.) and corporate governance (risk, Sarbanes-OxLey, etc.). Other kinds of applications, such as enterprise resource management and supply chain management, aren't well suited for SaaS yet because they require a Lot of customization, Herbert says. She also expects good results from scalability on the internet model of building capacity out, not up with new servers that don't require expanding the network. With SaaS plus software, she says, perhaps the biggest boon to IT will be the flexibility and wide range of options it opens up--trying out SaaS for a year, ten years, or one month while still keeping things running smoothly with in-house software. The great platform in the Microsoft builds platforms, Ballmer told an audience at a company-sponsored conference of developers. In past years, he said, the company built a platform for clients, for servers, and for mobile devices. Now Microsoft is in the process of building Windows Live, a platform in the internet that will intricately intertwine websites, web servers and software. For Microsoft and its 40,000 development partners worldwide, Windows Live will transform existing software products into user-facing services and create an uncountable array of new solutions that will enhance personal and business productivity, Ballmer promises audiences. We're building a service-based infrastructure, not server by server but a new management model, a new device model, [and] new storage, networking, and computational models from the get-go, Services will come out of the cloud via a users' desktop, which chief technical officer Ray Ozzie calls the ideal control point for individually or collaboratively creating, editing, publishing, and reviewing the documents vital to all information work. …