Ozzie Speaks On Microsoft Transition

"Because of Notes, Ray was the only guy who was able to create something that Bill/Microsoft couldn't dominate and take out," said a former Lotus colleague of Ozzie's.

In the past year, Ozzie has become the front-man for the Microsoft's emerging software-as-a-service game plan. He and Gates held center stage at the Windows Live and Office Live rollout last fall.

Ozzie said that while the SaaS realm unnerves vendors and partners alike -- with the threat of lost account control -- there will be plenty of opportunity for both parties if they are flexible and proactive.

"Whenever there is a change in architecture or a change in how things are deployed, there is opportunity in some way shape or form and anyone in any value chain -- that's Microsoft or any partners really -- should be looking at the environment and hopefully reshaping their business based on the opportunity," he said.

Microsoft itself, he maintained, has been shaped by this services push. Competitors like Salesforce.com have stolen a lead in SaaS, observers say.

The fact that Microsoft's initial service offerings will be "broadly horizontal" means features that many people are used to will be left out, Ozzie noted. That should provide an opportunity to provide capabilities and features atop the platform.

"In terms of hosting enterprise offerings, the full-featured offerings, that will probably be a very significant opportunity for partners, more so than for Microsoft which is trying to focus on horizontal, cost-reduced stuff," he said.

But partners, like Microsoft itself, have to keep their eyes open. "If the value that the partner is adding is purely infrastructural, you have to pay attention to what infrastructure changes are happening," Ozzie said. "In this particular case, Microsoft itself is being impacted by infrastructure changes in terms of moving things to services."

Solution providers mulled the news of Gates planned transition and Ozzie's new role late Thursday.

"Your first reaction, with someone in [Gates'] position -- you think 'is it going to hurt Microsoft?' But then you take a step back and look at the moves [Gates] made by bringing Steve up, and now it makes even more sense why they brought Ray Ozzie on. With his technical leadership and the business leadership from Steve, that's a powerful combination," said Scott Stanfield, CEO of Vertigo Software, a Microsoft consultancy in Point Richmond, CA.

Todd Swank, director of marketing for Nor-Tech, a Burnsville, Minn. partner waxed nostalgic.

"Realistically, I don't think this is going to have that huge of an effect on Microsoft or the channel as a whole. Microsoft has legions of intelligent people working for them. I'm also pretty sure Mr. Gates will stay involved in the areas that are critical ... That being said, it is somewhat sad to see such a legend in the industry announce his time to leave. Makes me feel old!"

Additional reporting by Stacy Cowley and Paula Rooney.