Yesterday my post about Microsoft and Google garnered a lot of responses. I've got to say, I'm looking forward to having a dialog with the readers here at ZDNet. It's a lot of fun to be in the middle of an active comment thread. Hopefully I can keep up and post responses. During part of that discussion, the issue of how software as a service can be a benefit for businesses came up. I realize that's the big question, so I won't attempt to tackle it head on (however my fellow ZDNet blogger, Phil Wainewright, does a great job), but rather talk about it in terms of Rich Internet Applications.
The holy grail of RIAs are those applications which can be deployed over the web but allow you to take both the application and the content with you. Being able to "synchronize" the application with the server which would download updated content and even perhaps updated versions of the application is the kind of feature that I think will bring RIAs to the masses. For businesses this creates a compelling distribution method. If you're building an RIA in house and you want to push out features, it's as easy as having your users sync with the server (which they would assumingly be doing anyway). On a grander scale they would do this on their PC as well as their devices, and they would have an exact copy of the application in both places, with the same data, available to them online or offline. It then really becomes the Universal Desktop and you can take the applications wherever you need to.
For a company like Microsoft, building, for instance, a rich internet version of Microsoft Office, would allow them to push out updates faster and perhaps even easily customize the product for higher end customers. While I don't necessarily like Microsoft's "lock-in" strategy, I understand both the business case and the development case. By trying to keep everything Microsoft-only, they can give developers a fairly consistent environment from which to create applications. In the software as a service model, a version of Office running on the web could, in theory, be expanded by a host of third party developers coding on WPF (although I realize MSFT hasn't been kind to the third party thus far).
For businesses, subscribing to Rich Internet Applications would not only empower the workers as mentioned above, but give them a flexibility when it comes to licensing as well as a more robust model for enhancement requests. The companies that succeed in software as a service, and more specifically, Rich Internet Applications, are going to be those that can quickly turn around feature requests for their best customers. That may be a difficult hurdle for Microsoft to overcome, but I think they have the right infrastructure in place. If they stumble however, there will be big companies like Google, or even Yahoo, there to fill the void and technologies like Adobe's Flash as alternative platforms. It's bound to be an exciting few years.