The Future of Software as a Service

What does the future hold for Software as a Service (SaaS) and what impact will it have on the SQL Server community? Microsoft's CEO Steve Ballmer shared the following sentiment during his keynote at the recent Microsoft Worldwide Partner Conference. Never been to a Partner Conference? Think of it as a TechEd-like event for business people in the Microsoft Solution Provider program.

"Everyone in our industry is rethinking the relationship between software and services. We believe the future is in software plus services--combinations that give customers more options and create great new opportunities for partners. Microsoft, with our partners, is positioned to lead the way." Microsoft, like many other software vendors, has been talking about SaaS for quite some time. My recollection is that Microsoft's early forays into using language like "software as a service" revolved around the idea of selling software subscriptions (e.g., the Microsoft Software Assurance program) and was arguably just a change in licensing models designed to produce higher and more predictable licensing revenue for Microsoft. Today, Microsoft is venturing more boldly into true SaaS models, with its plans for Microsoft Dynamics CRM Live being a great example. I encourage you to read the following press releases regarding Microsoft's SaaS ideas and the company's plans for Dynamics CRM Live:
·To see some interesting tidbits from Ballmer's keynote about Microsoft's SaaS plans, go to http://www.microsoft.com/presspass/press/2007/jul07/07-10WPCDay1PartnersPR.mspx .
·For more information about Microsoft Dynamics CRM Live, go to http://www.microsoft.com/dynamics/crm/live/default.mspx , and see the article Microsoft Announces Continued CRM Momentum and Outlines Roadmap for New Microsoft Dynamics CRM Live Service. Microsoft's plans for hosted versions of its software aren't limited to Dynamics CRM Live; however, the Dynamics CRM Live offerings caught my interest for a few reasons. First, Dynamics CRM Live is a data-centric solution with strong ties to the reporting and business intelligence (BI) worlds. Also, I find myself in the interesting position of being tasked with playing a leadership role in designing and rolling out Microsoft CRM solutions for my team at Solid Quality Mentors. I have a lot of experience being the talking head pundit who can wax eloquently about SQL Server topics one week, and then have an entirely different opinion the next week. Heck, that's what pundits do. But now I find myself stuck making decisions that I'll be personally responsible for and that will affect me long after I make them. Ouch. That's not as much fun. Here's a brief summary of where my head is at with respect to rolling out CRM within my organization. On the one hand, managing and deploying CRM isn't strategic to my business, so I'm inclined to choose a hosted solution. On the other hand, although managing and deploying CRM isn't strategic to my business, making it work exactly the way I need it to work is important to my business. Can I trust a hosted provider? Do I leave myself exposed to a hosted provider that doesn't care as much about my business as I do? Would that lead to an overall lower level of service and quality for my CRM solution? I suspect that many businesses are struggling to make similar decisions. I think that most businesses are intrigued by the idea of hosted services and are inclined to use them. I also think that many businesses are scared that the hosted solution won't meet their needs. Sometimes hosted solutions work best and sometimes they're a bad idea. How do you decide? I haven't yet stumbled across a good way to decide. I started this week's editorial by posing the questions “What does the future hold for SaaS and what impact will this have on the SQL Server community?” Frankly, I'm not sure. I do think that there's a demand for more hosted solutions and that Microsoft and other large global software companies will aggressively pursue this market. I suspect that Microsoft and other software vendors will get a lot of things wrong in their initial forays into SaaS, but I also think that they will quickly begin to shake up the small, midsized, and large vendors already in the hosted SaaS market. And I'm not sure where the trend ends. Does hosted CRM today lead to Microsoft offering a 24 x 7 remote DBA SaaS in the future? Generally speaking, Microsoft avoids stepping on its partner's toes. However, when a market is big or strategic enough, Microsoft can handle stepping on its partner's toes and "helps" its partners move into different places in the Microsoft solution provider ecosystem. So, I'm not sure if SaaS is one of this year's flash-in-the-pan buzzwords or if it's the direction of things to come from Microsoft and other large software vendors. It will be interesting to see how market forces cause SaaS to evolve over the coming years. The pundit in me is free to have a different opinion next week, but the business executive within hopes I'm making the right decisions today.