Software as a Service (SaaS) Definition and Solutions

But Microsoft's loyal army of partners have also expressed doubts. Can Microsoft successfully move from the on-premises software world to the Web-hosted one? And if so, where does that leave its partners?

Their future may be in embracing the same dual-headed strategy as Microsoft.

Two Microsoft partners -- one huge, one smaller but fast-growing -- are doing just that.

Computer Sciences Corp. said last week that it will begin to resell Microsoft's Business Productivity Online Suite (BPOS) to its large government and corporate customers.

CSC will sell subscriptions to online versions of Microsoft Exchange, SharePoint, Office Communicator and Live Meeting. The full suite costs $15 per month per employee, though companies can opt for a $3-per-month version for non-desk-workers.

CSC, which already manages 700,000 Exchange and Lotus Notes e-mail accounts, will now have a trio of offerings, according to Brian Boruff, vice president of cloud computing for CSC: BPOS hosted by Microsoft; BPOS hosted in CSC's "Trusted Cloud," which will offer better security and will cost 20% to 40% more; and CSC's existing outsourced e-mail management services.

Customers will be able to opt for a mix of all three services to maximize cost savings and retain high security for certain data or employees, Boruff said. CSC will be the master data administrator and will provide all Level 1 and Level 2 support, he said.

Another company, Azaleos Corp., said today that it will also begin to resell BPOS, in addition to its existing service of remotely managing on-premises Exchange servers.

Like CSC, Azaleos will essentially offer free monitoring and limited support for workers on BPOS as a bonus for customers of its core service.

The moves put Azaleos and CSC in the forefront of market trends, according to analyst Michael Osterman of Osterman Research.

"BPOS is clearly picking up steam, and I think we'll see more hybrid messaging vendors in the fairly near future," Osterman said. "It just makes sense for organizations that are too large to be convinced to migrate tens of thousands of on-premise users to a hosted model, but that operate lots of users at smaller locations. This would apply to just about every insurance company, realty company, bank, brokerage, retailer, etc. -- we see lots of them moving toward a hybrid model."