SaaS Week

The news media is still abuzz with speculation on Microsoft's surprise multi-billion dollar bid to buy Yahoo and what the acquisition might mean for the industry, if it indeed even takes place. Tim Low, VP of Marketing for Daptiv (a company that offers project management and collaboration software through SaaS) had some interesting comments on Microsoft's bid. Low worked for Microsoft for several years before joining Daptiv. This is what he had to say:

Microhoo?

1. SaaS is just as important as Search: Most of the coverage is focusing on search. While the search market share bump will undoubtedly drive revenue for Microsoft, I see the acquisition as a validation of software as a service model. Yahoo does it really well with consumer web services like Yahoo Mail and IM, not to mention Flickr which is really cool.

2. New Blood: Microsoft needs an infusion of outside energy and people who've seen the world from outside Redmond. This could be a great way to do that. Typical Yahoos have likely worked at other Silicon Valley companies, and have a breadth of experience that might really bring life into Microsoft if it lets them. Hybrid vigor might be the way Microsoft is finally able to move beyond the PC era.

3. Search might be the easy part. Just swap in the Yahoo technology, add their existing market share, and you've probably stopped the bleeding. The other pieces of Yahoo are going to be challenging though. From Flickr to email, to calendaring and many other online services, Yahoo overlaps with efforts at Microsoft. Historically Microsoft has not been able to clearly position a new service (windows live hotmail anyone?) in a way that business or consumer customers comprehend, so I think these myriad overlaps present perhaps a much bigger challenge to integrate into the company's operations. I would make live/die choices for each, and have one survivor with a simple name.

4. Which brings me to #4. Brand is important. A rose is a rose is a rose is a rose, except at Microsoft where it's Microsoft Windows Live Hotmail. I wouldn't be too hasty in dumping the Yahoo brand. It brings a lot of attributes Microsoft needs for the next decade like freshness and whimsy, approachability and fun--attributes that Microsoft will struggle to create under the Windows or Office brand. Does Yahoo become the brand for Microsoft on-demand services? Who knows? So far they haven't seemed to understand software as a service, just 'software plus services'. I just hope they realize that they're buying a lot more than technology and engineers, and they should put every single asset to work for their shareholders.

Do you agree? Disagree? Share your thoughts in the comments area.