SynApps The Open Source and Gadget blog

We are having some fun here at the Parallels User Conference. Other than drinking too much with all the friends here, we also announced our partnership with Parallels about the integration of Open-Xchange into Parallels' automation and administration ecosystem. This will enable Service Providers to easily provision and sell OX based offerings to their customers. Parallels CEO Serguei Belloussov's presentation was all about Service Providers having to move to the SaaS delivery model for them to be able to make money in the future. Serguei thinks they've got to move fast or Google and Microsoft will grab their customers. I agree.

Reuters put out a news story titled "Microsoft braces for major customer shift". It starts as expected, when Chris Capossela said: " the company will see more and more companies abandon their own in-house computer systems and shift to "cloud computing," a less expensive alternative." It also mentions that Microsoft is building big data centers to offer their SaaS offerings directly to end users, circumventing their current partners in the Telco and Service provider space. Many thanks - makes them the other enemy besides Google for all these...

But then, Capossela is quick to announce a recent customer win: "...Coca Cola Enterprises Inc (CCE.N) signed up 70,000 seats for Exchange Online, switching over from IBM's Lotus Domino system.".

Now wait a minute. Is this what Microsoft thinks SaaS is all about? Moving Coke from Domino to Exchange? Even if the resulting system is hosted at Microsoft, it is an outsourcing deal with lots of migration and integration headaches. Stuff that IBM or EDS or CSC normally does.

We at Open-Xchange believe the sweet-spot for SaaS is SOHO's and SMB's first, as they don't have these big integration and migration issues and they can save the most money compared to an on-premise installation. This market is huge, the cost advantage of SaaS can be over 90% compared to the on-premise model, and that market yet has to get all the benefits of business class eMail and collaboration. This is where SaaS will excel first, rather than in the big enterprises.

So did Microsoft get this market wrong? Maybe not. Maybe Microsoft is trying to play all the markets all at once. Keeps it busy and may buy some time for the existing service providers to make the move to competitive and open SaaS offerings.