Virtualisation and hosted applications : Microsoft's Perspective

4) What are the dangers and negative effects associated with moving to online software between concerning the network of players in the IT industry?

It is not possible to review Microsoft’s online service provision as an exclusive issue. Due to a remarkably high level of interdependence in the IT industry, such a move comes with implications on not only the provider (Microsoft) and users (subscribers) but also a collection of other stakeholders that will be affected by such a fundamental step.

Although Microsoft is talking about letting its partners sell its rental model initially, it is in effect moving more to a direct relationship with the users much like the way that Google deals with its customers. From the supplier’s perspective, this will have massive repercussions on the industry specially when there is a good chance other software providers will follow suit. Other companies that can be affected are complimentary service providers such as antivirus. These products may be deemed obsolete as software is no longer stored within company networks.

Another big factor is the necessity to have excellent communication links because if the internet connection goes down for any reason the companies operations will not be limited, but put on halt altogether. No being able to carry out any business for a particular amount of time is a risk majority of companies are not willing or can not afford to take. To counter this effect it is very important that investment is made in the network to ensure uptime with resilience and automatic fail over facilities using multiple carriers.

To sum up, Microsoft’s online software provision is not filling a gap in the market. Nevertheless if successful it would fill and maintain a respectful position in the online software provision arena and has all the potential to be the final step in transforming the entire software industry to a live cloud base accessible by users from anywhere at any time. The benefits of this are quite clear with more centralised distribution and a quicker response to upgrades and advances in software technologies. However, businesses should make certain they are moving forward with technology as a whole and not only with SaaS; this means taking into consideration other aspects such as resilience in connectivity and reliable support infrastructure.