Earlier this week, Google and Sun announced they would be working closely together to help develop the Internet into a platform that will make corporate applications available through a Web browser, effectively making the underlying operating system irrelevant.
For a number of years now, Sun has been touting the concept of the network actually evolving into the main platform for delivering applications. With the success of companies such as Salesforce.com, which delivers a hosted CRM application accessible through a Web browser, the concept is being realised. However, Microsoft's Martin Gregory believes the company is willing and able to change its business model if required.
"Hosted applications and online delivery will be more and more a feature as we go further. Is that an area that Microsoft may get into? Absolutely -- if people wanted to say 'hey, I will pay a dollar a day or whatever, for access to this particular application', I wouldn't rule that out as a business model'," Gregory told ZDNet Australia .
But Gregory argues that hosted applications have their limits because they cannot be as complex as applications based on an operating system such as Windows, which means there will be room for both the Web-based hosted application model and the more traditional operating system and application model.
"The kind of products and applications [being hosted online] have core functionality. For example, if I look at Hotmail and Outlook; Hotmail is great because I don't need a PC and can do it wherever I am but Outlook gives me a little more with calendaring. But if I have an Exchange Server I get a whole superset," said Gregory.
According to Gregory, the market is slowly moving towards a hosted model, but at present it is only being used by companies and departments of companies that require no more than very basic functionality.
"I think you may well see commodity delivered online first -- very basic services. From a technology standpoint it is probably peeling back the software and having basic levels of service… that would be absolutely right for some consumers and businesses," said Gregory.
The move towards browser-based applications is well under way in the Asia Pacific region, with a 'huge number' of smaller companies offering point solutions, according to Rolf Jester, research vice president at Gartner.
"We have found quite a strong emergence over just the past year or 18 months of lots and lots of suppliers of either an application or business process. These are applications… something you access through your browser from wherever you are," Jester told ZDNet Australia .
Jester said the phenomenon is interesting because the companies are generally small and they are focussing on very specific vertical and horizontal markets: "They are not the sort of companies people think about and there are a huge number -- we can't count them all."
"[They are] very often focussed on a particular vertical market. For example, a company selling solutions for legal firms or one focussed on a particular horizontal process," said Jester who gave the example of a firm that would only sell its application to legal firms or one focussed on helping human resources directors manage their employee appraisal and review process.
Jester said these smaller companies have an advantage because they are currently flying 'under the radar' and are able to provide businesses with a no frills application that does not require any technical knowledge: "I am a business person and I don't understand, don't want to understand and don't want to have to understand the technology that underlies it."