Microsoft announced their new software-as-a-service (SaaS) initiative a few days ago:
At last year's Worldwide Partner Conference, Microsoft CEO Steve Ballmer described the industry's shift to a software-plus-services strategy: a combination of on-premises, partner-hosted, and Microsoft-hosted software that empowers customers by offering richer applications and more choices. Today, Chairman Bill Gates announced Microsoft Online Services: reliable, secure, enterprise-class software delivered as subscription services that you sell and Microsoft hosts.
Microsoft Online Services provide the rich interactivity of on-premises client and server applications, and the flexibility and scalability of Web-based services. You can generate predictable recurring revenue streams through new managed services, business-process consulting, tier-one end-user support, and your own value-added services. Efficiently expand your customer base with the new, easy-to-deploy Microsoft Exchange Online and Microsoft Office SharePoint Online implementations, without adding infrastructure or headcount.
Offer your small- and midsize-business customers real-time collaboration and integrated experiences regardless of device or location, technologies. Your customers decrease routine, time-consuming IT administration and associated costs, increase operational efficiencies, and improve business agility.
Doesn't anyone other than me me see a few issues with this?
First, be honest... When was the last time your Internet went down? Last week? Last month? Certainly within the last 90 days, you've had some kind of Internet issue. I don't know about you, but I really don't want my entire company shut down and unable to edit Word documents when the Internet is borked up.
Second, I like having my data close to me. Hosted somewhere on a Microsoft server isn't as good for my business as sitting in my building, properly backed up of course.
SaaS has it's place - applications that are so prohibitively expensive to purchase that small businesses simply couldn't afford to use them, or programs that require such heavy-horse powered hardware that it isn't practical to run locally for a small number of users. In those cases, it makes sense.
I'm sure we'll see more and more small businesses move to some sort of hosted model - it's cheap, and small business owners have finite resources.
However, once you reach a certain size, say five or more desktops, externally hosted apps don't appeal to me. A brand new high end server and five workstations, including Office licenses, can be leased for less than $300 a month, and outright purchased for less than $10,000.
Own your equipment, and own your data - that's my advice.