Is Microsoft inching toward SaaS?

As more vendors move toward an on-demand software delivery model, Microsoft might be preparing to join the party. In an apparent shift from its business of selling packaged software for personal computers, Microsoft plans to make available free software that connects its Windows operating system to software and services delivered on the Internet, according to an article in the New York Times. The company is clearly looking for ways to retain its customer base, as competitors start offering pay-as-you-go options in its sweet spot. While the article does not deal with the issue of enterprise licenses, it will be interesting to see if this model is rolled out as a corporate service, and what ramifications this could have on enterprise agreements. Microsoft's new Windows Live software suite includes an updated email program, a photo-sharing application and a writing tool for blogging. Google has already made its intentions to challenge Microsoft clear with a suite of free word processing and spreadsheet applications that can be accessed through a web browser. While Microsoft is a late entrant to this business model, it has a head start when it comes to market share with an installed base of more than 1 billion Windows-based personal computers.

For more on Microsoft and its new delivery model:
- read the article in Cnet