S+S: The Kobayashi Maru of Microsoft

July's WPC 2008 conference was all about putting some meat on the bones of Microsoft's Software + Services strategy. Partner pricing for deskless and hosted Exchange and SharePoint was the buzz of the conference, causing many to speculate about who owns the customer and would other Microsoft software products soon follow suit to the S+S strategy (and pricing) of Exchange and SharePoint. Frankly, there's a lot of confusion out there about just what is Microsoft's Software + Services. ComputerWorld editorial director Don Tennant talks about this in his opinion blog piece, Microsoft rains mud on SaaS. "The problem is that Microsoft's strategy is to trivialize SaaS and replace it with its own concoction, which will do nothing but confuse the issue. Allison Watson, Microsoft vice president of the worldwide partner group, even claimed with a straight face that SaaS was the rage two years ago and that now even Microsoft's competitors are talking about "Software + Services." That's sheer nonsense."

Tennant's point is that Microsoft doesn't have to dominate the online world of SaaS software. They should be content "being under the cloud with the rest of us". But Microsoft can't be content. When you live in a company with a market cap of $239B, it might be easy to say let's stick with what's working. But Microsoft can't sit idly by and let Google, Salesforce and others propel themselves into the leadership spot as the dominant next generation software company. Sometimes the best way to compete is to change the rules of the game, ala James T. Kirk and his unique solution to the Kobayashi Maru. Sometimes the best strategy is to change the rules of the game.

Is S+S different than SaaS or the same thing? Is this Microsoft's way of creating diversion in SaaS to better play catch up? Is Microsoft the "software" in S+S, leaving partners to be the "services"? Is Microsoft redefining SaaS so it will also include traditionally installed software? Right now, S+S is probably a bit confusing. But I think we can untangle things a bit.

S+S is about more than playing catch up. Microsoft's in it to win. Microsoft is redefining the online software argument from just SaaS, to SaaS + SOA (services oriented architecture) + Web 2.0. If you haven't visited the areas of Microsoft's Web site focused on S+S, checkout the overview page Bring It All Together,  S+S Marketing Best PracticesSaaS Incubation Center Program, and the SaaS page for service providers. Gradually business titles and marketing pieces are changing over from SaaS to the S+S moniker. It's my guess that these elements will all make the shift to being marketed as S+S. Here's a bit more from the S+S overview page:

Software-plus-Services is an industry shift - combining Internet services with client and server software to deliver more compelling opportunities and solutions. Microsoft is dedicated to helping its consumer and business customers and partners take advantage of this approach by uniting multiple industry phenomena including software-as-a-service, service-oriented development, and the Web 2.0 user experience under a common umbrella.

Recognizing that ultimately customers need solutions optimized for their specific needs, it has become clear that by marrying the advantages of Internet services and client or server software, we can deliver new capabilities and offer new levels of utility, convenience and flexibility.

Microsoft helps its customers and partners capitalize on the opportunities presented by the evolution to Software-plus-Services. Microsoft's platform uniquely supports all classes of the services manifestation - services delivery (Saas), services composition (SOA) or the services experience (Web 2.0) - across a range of devices in addition to the PC, the various types of browser clients, servers in data centers and Internet services. It will provide multiple ways to monetize the results through the familiar model of software licensing, offering services by subscriptions, leveraging Microsoft's industry-leading advertising platform or the less familiar micro-payments of Microsoft Points.

Redefining the game as S+S means Microsoft can include on premise software as part of the argument for SaaS and cloud services. And in many respects, they are right. Not everything can and will just automatically move from on premise software to SaaS or cloud services. Salesforce is probably the best example of the SaaS success story and even there Microsoft is taking a page out of Benioff's playbook with Microsoft Dynamics. Introducing Office Live services, Microsoft Online Services (hosted Exchange and SharePoint) and up-and-comers like Live Mesh combines new fully online software capabilities (building blocks in some cases) with hosted versions of Microsoft software. Will we see a fully online web 2.0 version of Office applications? I'd say yes, but they will also work with installed versions of the same software on your desktop. That's a key difference of S+S, something Google would have trouble replicating.

The best way for Microsoft to win the SaaS game is not to play by the currently defined SaaS rules, but to redefine the game to better play to Microsoft's current strengths, while building up the technology, assets, thought leadership, mindshare, marketing and channel. It's no small feat to pull off, but by putting everyone on the Microsoft team behind the shift, Microsoft has much better odds at playing out its own Kobayashi Maru.

Like this? Here are some of Mitchell's recent posts.Podcast: Simon Crosby - Why Simon Loves Hyper-VPartners Quake Under Microsoft Hosting $3 PricingPictures From Microsoft WPCPodcast: Simon Crosby - The Hypervisor Wars Are Over (part 1)Do You SharePoint?iTunes Achilles' Heel In iPhone 3G Launch Product Reviews: Microsoft Live Mesh Google App Engine LiveNewsCameras.com Xobni Outlook plugin

Rock Star jobs in SaaS: SaaS Jobs

Recent Converging Network Blog Posts: Get Ready For XaaS Everywhere Unbelievably Bad Web Password Security Back From Hiatus, Saved by Web 2.0 Technology It Takes a Village.. ah, actually, being there first and tons of hard work

Favorite Book Recommendations: The Big Switch Zero Day Attack Clear Blogging

Check out Mitchell's Converging On Microsoft Podcast. Current Podcast Episode: Security Mike Gets Serious About Security

Also visit Mitchell's personal blog The Converging Network and SSAATY Security Podcast.Visit Microsoft Subnet for more news, blogs, opinion from around the Web.Sign up for the bi-weekly Microsoft newsletter. (Click on News/Microsoft News Alert.)
Join the Network World communities on Facebook and LinkedIn to comment on topics that are top of mind.

Copyright © 2008 IDG Communications, Inc.

SD-WAN buyers guide: Key questions to ask vendors (and yourself)