On March 3rd, at the annual Microsoft SharePoint Conference, Bill Gates announced a new initiative in Microsoft's strategy to provide online services. In itself, the announcement does not break any new ground. Last year Microsoft CEO Steve Ballmer described the Microsoft spin on software plus services as a combination of on-premises, partner-hosted and Microsoft-hosted software. Gates' announcement offered those same services to all companies (previously the target was businesses with more than 5,000 users). It also specifically mentioned Microsoft server product lines that will be offered on a subscription basis.

This announcement, coming hard on the heels of Microsoft's bid to acquire Yahoo, may be significant. It is possible the acquisition of Yahoo would be beneficial not just to provide direct competition to Google in the Internet advertising/brand marketing arena but also because Yahoo has a robust distributed infrastructure that would provide a foundation for a software-as-services solution.

So, just what are the implications of Gates' announcement? By paying a per-user subscription fee, Microsoft will host and provide two of its premier server products in addition to some of the useful features of its communications suite (instant messaging and Live Meeting). The presumed benefits are the businesses that purchase this subscription no longer have to support and host those servers nor would they have to bear the expense for server and client access licenses (CAL).