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Microsoft has just announced a solution to help independent software vendors and hosting service providers deliver software as a service, and is talking up the benefits of this type of delivery. Which begs the question: Why not Office as a service?

Microsoft has launched Microsoft Solution for Windows-based Hosting for Applications Version 1.0 saying that it "provides independent software vendors (ISVs) and hosting service providers with the platform, tools and best practices to deliver software as a service, an area in which leading IT market research and advisory firm IDC estimates spending will reach $10.7 billion (US) worldwide by 2009."

Introducing the new offering, Pascal Martin, general manager of Worldwide Hosting at Microsoft, said: "Software as a service offers new business opportunities for ISVs and service providers, but also presents new challenges as they must enable on-site applications for delivery as a hosted service... In the Hosting Group we have a unique set of expertise and experience in utilising the Microsoft platform and tools to help our industry partners enable such solutions and offerings. Windows-based Hosting for Applications provides ISVs and service providers with tools and guidance to maximise the software-as-a-service opportunity."

To emphasis the advantages of the new product, and software as a service in general, Microsoft had a beta test customer reference, Made2Manage Systems Inc, which provides enterprise resource planning solutions for small to midsize manufacturers.

This company was "missing out on sales opportunities because many of its potential customers didn't have the resources to buy and manage a client/server-based system."

"We are conservatively projecting that we will bring 100 customers onto our new hosting environment in the first year," said Doug White, product manager for Made2Manage Systems. "Without Windows-based Hosting for Applications, there is no way we could scale to 100 new customers because of the labour and risk that would have been involved in provisioning them manually."

"We've seen a growing need among our customers for the hosted model of application delivery," said Jeff Tognoni, chief executive officer for Made2Manage Systems. "They want to be relieved of the IT burden; they want anytime, anywhere access to their software; and, especially after Hurricane Katrina, many of them want to move their business-critical applications to a safety-enhanced, reliable environment."

So what about Microsoft Office as a service? No longer would IT managers have to worry about keeping all those client-based packages up to date, and paying for installations that are rarely used just to stay on the right side of the piracy police.

The question of OpenOffice, if not Microsoft Office as a service was a hot one back in October. Remember? That was when Google and Sun Microsystems announced a partnership under which the two companies said they would "explore opportunities to promote and enhance Sun technologies, like the Java Runtime Environment and the OpenOffice.org productivity suite".

That announcement sparked a flurry of speculation about StarOffice being offered under a software as a service model. One US columnist summed up the general feeling thus: "Every guru, pundit, and know-it-all, including me, has an opinion about what [the Sun-Google alliance] means for the future of software, Google, Microsoft and the enterprise. And a lot of them, me included once again, believe that 'making it easier to obtain' is code for on-demand - or software as a service. ...Will the combination of open source and software as a service commoditise general-purpose applications, thus disintermediating Redmond and its cash cow, Microsoft Office?"

Google has already taken the first steps in the direction, although not with Sun. In April Google launched a calendar offering - a move that created a huge stir in the industry. As iTWire reported: "Unlike [Microsoft] Outlook, it is free. It is operating system agnostic. All you need is the web browser of your choice."And guess what. Very shortly Google will have a hosted word processor application, Writely, (www.writely.com) which it acquired in March from a small Silicon Valley startup. There not taking new customers while they integrated with Google, but you can sign up to a waiting list to be notified when they're back on the air.

Then there is Zoho Office http://www.zoho.com. It offers a virtual collaboration platform in which individuals and groups can communicate, collaborate, organize and share information seamlessly using anumber of useful applications like email client, virtual storage for documents, personal and group calendar, task scheduler, contacts manager, instant messaging and discussions board. And it has a wordprocessor and spreadsheet.

A full blown hosted Office competitor, Ajax Office, billed as "a complete OpenOffice suite usable via your browser was under development last year but the project has stalled. A website remains (http://ajaxoffice.sourceforge.net/) but no indication if or when the project will be revived.

Ajax's founder, Paulo Massa was quoted at the time predicting that "someone will do this within a year...The business model is still not completely clear, but someone will do it."

If Microsoft Solution for Windows-based Hosting for Applications Version 1.0 is all it's cracked up to be what's to stop someone using it to launch a hosted OpenOffice solution?

A full-blown hosted alternative to Microsoft Office, and OpenOffice, is surely coming. If Microsoft can't beat 'em it will have to join 'em but it's hard to see how it could preserve its multibillion dollar Office revenues in a hosted delivery model, even without competition form the Open source community.