The combination of the software-as-a-service model and Web-hosting providers could give users a safe, sometimes low-cost and low-risk way to jumpstart Webcasting initiatives.

The emergence of software-as-a-service is posing both new opportunities and challenges that Microsoft and numerous other software vendors tried to address with new strategies and products detailed this week at HostingCon 2007 conference in Chicago. The conference focused on Web-hosting and the rapidly growing software-as-a-service market, with about 40 sessions that ran from Monday to Wednesday.

Many see the key player in the hosting/software-as-a-service market as Microsoft. The launch of Microsoft Windows Server 2008 next February, which includes a Web server called Internet Information Services 7.0, will give hosting providers “significant enhancements” improving security, scalability and reliability of software-as-a-service applications, Microsoft said.

“Focused on delivering a low total cost of ownership for its server products, Microsoft has developed key features such as integrated health management for Web services, optimized PHP, Hypertext Preprocessor application hosting on Windows, a fast and scalable configuration system, and delegated administration,” Microsoft says in a press release.

“The market is moving very rapidly towards an on-demand world and the demand, therefore, for hosting facilities is only accelerating,” says Jeffrey Kaplan, who runs the consulting firm THINKstrategies. “What you’re seeing is everybody from Microsoft on down … trying to do all they can to capitalize on that demand and offer new technologies to support the hosting companies’ needs.”

Web hosts provide server space, Web services and file maintenance to users or companies that want to build Web sites but do not have their own Web servers.

Web hosting plays an important role in the global software-as-a-service market, which reached $6.3 billion in 2006 and is expected by the analyst firm Gartner to more than triple to $19.3 billion a year by 2011. The prominence of the software-as-a-service market can be seen in two initial public offerings filed this month, by NetSuite and SuccessFactors.

Software provider SWsoft referenced Gartner’s prediction this week when it announced that five vendors will begin selling applications based on a standard it developed to make it easier for software vendors to sell applications through hosting providers. “The APS [Application Packaging Standard] defines specifications that provide ISVs with a unified, open platform to create ‘pluggable’ applications that can be delivered by any service provider with minimal integration costs and effort,” SWsoft said in a press release.

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