SaaS Leadership Hinges on Microsoft's Yahoo Bid - InformationWeek

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Commentary
2/5/2008
09:28 AM
David Linthicum
David Linthicum
Commentary
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SaaS Leadership Hinges on Microsoft's Yahoo Bid

I guess I could point to all of the press releases and blog posts about Microsoft's $44 billion Yahoo bid, but there are thousands at this point and you already know what's going on... A core issue here is ownership of the SaaS marketplace, a clear direction for all of the major players and thus the driving force behind the current land grab, and this deal.

I guess I could point to all of the press releases and blog posts, but there are thousands at this point and you already know what's going on. Indeed, as many expected, Microsoft is looking to purchase Yahoo for $44 billion, this to better compete with the pressure coming from the Google Juggernaut that's now removing some of the office automation business from Microsoft. Google is going to counter, for sure, and the bidding war could drive the price up - that is, if the government does not step in and stop the deal over antitrust concerns. You've got to love this business.A core issue here is ownership of the SaaS marketplace, a clear direction for all of the major players and thus the driving force behind the current land grab, and this deal. I'm sure we'll see other Uber Deals shortly - can you say "Salesforce.com?"

With the advent of rich Internet applications, such as the ones Google has knocked out of the park, network-delivered applications are the way of the world these days. I find myself using Google this and that on a daily basis, even though I own the complete Microsoft stack. Only a matter of time before I ask myself why I need Microsoft anymore, and this acquisition will provide me with some SaaS-delivered alternatives to going completely Google.

Actually, the current online offering from Microsoft is not bad, but it has been lagging behind Google in both innovation, breadth of offering, and features. I can't help but think that Microsoft has been dragged into on-demand delivery kicking and screaming, but so they were dragged to the Web many years ago as well. History is repeating itself. Microsoft can't be second in its world and still survive, thus this buying spree will continue no matter if the Yahoo deal goes through or not. Indeed, Microsoft has some bigger tricks up its sleeve, perhaps the mother of all SaaS offerings, and it's in the queue right now. The trick is to monetize it correctly, doing something north of free, but south of ridiculous. Google will continue to offer its stuff for bubkes, since they already have their ad model revved up and working. Not sure Microsoft will be good at that anytime soon.

What does this mean to you? Nothing right now.I guess I could point to all of the press releases and blog posts about Microsoft's $44 billion Yahoo bid, but there are thousands at this point and you already know what's going on... A core issue here is ownership of the SaaS marketplace, a clear direction for all of the major players and thus the driving force behind the current land grab, and this deal.

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