The Connected Web

"If we do our job well, they'll never want to move back on-premise." It's a bold statement of the kind you'll often hear from purebreed SaaS providers promoting what you might call the 'Switch to SaaS for Free' effect. But it was a surprise to hear it from the mouth of a Microsoft executive, even if it was a member of the vendor's Online Services team. The revelation came at a blogger roundtable held last November at the US launch of the services, which offer Microsoft-hosted Exchange, SharePoint and Live Meeting delivered over the Web for a monthly subscription.

Microsoft still remains true to its 'software-plus-services' strategy, pointing out that the online services support full-function Windows clients with the ability to work offline, and they integrate to on-premise directory servers and other IT assets. It sees its on-demand offerings working in harmony with on-premise software. In addition, the company's spokespeople are always at pains to emphasize that, unlike competitors, it lets its customers choose for themselves between on-premise servers and its hosted services (even though, as Forrester analysts have pointed out, Sharepoint Online is missing many of the collaboration capabilities of its on-premise equivalent).

But in reality, the choice customers are making always seems to be in one direction. It's no wonder when you consider the financial advantages. Microsoft estimates that customers will save between ten and fifty percent by moving online (the higher figure comes into play when moving off 'legacy' platforms such as Exchange/SharePoint competitor Lotus Notes). They can make those savings without incurring any upfront infrastructure cost, since Microsoft as the service provider funds all that out of its own reserves. Those same upfront costs will surely act as a powerful deterrent to any organization that ever considers moving back on-premise, especially in the current economic climate.