Gates sounds off on software-as-a-service

Microsoft chairman Bill Gates reaffirmed the company's faith in the software-as-a-service trend and said it plans to drive both on-premise and hosted apps.

“Software as a service is a very important trend and something we believe in a lot,” Gates told a few thousand Microsoft Business Solutions customers and partners at a US event. “Software as a service is a change of relationship between us and our customers.”

In fact, that’s what many solution providers and vendors worry about. They see SaaS as a trend that could upset the balance of power in account control.

Gates reiterated that the world will need on-premise and hosted software, and Microsoft aims to play a big role in both camps. “Our software will be available on both a server and service basis,” he said.

There will be instances where on-premise software will be preferred and others where hosted software or managed services will take precedence, according to Microsoft, which some industry observers say is hedging its bets with such statements.

Gates said Microsoft can do many things in terms of desktop state management backup and administration that will make on-premise software easier to manage and use.

He cited the company's Systems Definition Model as an example of easing the management of a pool of servers.

Though Salesforce.com, Webex, NetSuite and other pure-play SaaS players get most of the attention, Microsoft likes to point out that it has its own SaaS knowledge base.