Before anyone, whether it be Microsoft, Google or someone else, changes the face of corporate computing, however, Web-based products need to mature, Cain points out.

For Microsoft, the challenges in providing large-scale SaaS services for business "requires significant expertise in high availability, security, multi-tenant architectures, network topologies and problem resolution," Cain writes in the Gartner report. "Furthermore, Microsoft is retrofitting its existing software to the multi-tenant server model. It won't be until the next version of Exchange [due in 2011] that its core products are better architected to run in a multi-tenant SaaS model."

Google's number-one priority is to overcome the perception that its suite of apps aren't secure or robust enough for the corporate environment.

But just how would Microsoft's new offering and the presence of a viable Google apps offering affect internal IT operations? Cain says that "there are going to be some ultimately dramatic workforce changes as a result of the shift." For example, running corporate e-mail systems is "drudgery," Cain says, even though you need talented people to manage the system. "There's not a lot of value-add to the company," he notes.

If a company uses Microsoft to host its Exchange Server 2007, for example, then "one could contend that those staffers could focus on things that add much more value to their companies," Cain says.

Due to its overwhelming market share and if Microsoft is able to eventually add applications such as Office to its SaaS suite, Microsoft's endeavor will most likely prove the sports truism that "the best offense is a good defense."

"Microsoft's SaaS investment is both an offensive move to capture operational revenue in addition to the license fees it now collects," Cain writes, "and a defensive measure to combat potential incursions from suppliers such as Google."