And the sales channel for on-demand options is catching up to the trusted partner network of the established on-premises players. There's no shortage of alternatives to Microsoft Office, but many have had a DIY-flavor that was a non-starter with some business owners. It's one thing for a Silicon Valley startup or Web 2.0 company to eschew the market leading software in favor of a SaaS alternative, but more venerable and less technology-centric companies take pause.
However, the imprimatur of legitimacy conferred by an established sales channel may shift that pause to play. And that should have Microsoft concerned about the market share for MS Office because Google has done exactly that.
Google has a launched a formal reseller program for Google Apps Premier Edition. That's the SaaS office productivity suite that poses a direct competitive threat to MS Office. Now Redmond's not exactly resting on its laurels, building its own portfolio of SaaS apps, but full-blown Web-based MS Office isn't coming this year and VARs see the SaaS opportunity today.
For Microsoft, which sells 95% of its software through VARs, the channel just got crowded and the fact that it's Google shouldering in Redmond's turf can't be comfortable. To be sure, the crowding is largely in perception at this point: according to Gartner, Microsoft has 440,000 resellers compared with Google's 50. But as anyone who's watched Google move into a new market (are you using Hotmail or Gmail?) knows, that number is going to grow quickly.
Is Google hurting Microsoft today? No. But, today ends soon.