Microsoft's plan to launch a range of software-as-a-service products is one of the most important strategic initiatives the company has made, according to Bill Gates.
The Microsoft chairman said the Windows Live and Office Live services, which will be available to test next year, will complement, not replace, existing Microsoft products. But analysts said they could have a profound effect on corporate IT.
Windows Live, targeted at consumers, will provide via the internet updated Messenger and Hotmail services, Onecare PC health check and a virus scanner.
Office Live is aimed at smaller companies but could be adopted by larger organisations. It will comprise 20 online business applications to help automate daily tasks such as project management, sales and collateral management, customer management, expense reports, time and billing management, and secure internal and external collaboration.
Mike Davis, senior analyst at Butler Group, said the services could totally change the face of IT investment. In future, users will be able to buy software on an ongoing basis rather than pay up-front through Software Assurance or an Enterprise Agreement. Those planning to renew their volume licensing deals will have to assess which model offers the best value for money, he said.
Gartner vice-president David Mitchell Smith said IT departments should consider how the software-as-a-service model could be used in their organisation, even if they have no immediate plans to deploy it. End-users could introduce software onto corporate networks that is beyond the control of the IT department, he warned.
Citing the widespread uptake of instant messaging services, Mitchell Smith recommended companies assess how such applications and services could be deployed within business and the potential security impact.