Microsoft and BT hook up for hosted apps

Small firms will soon get access to an online marketplace for 'software as a service' applications
Written by David Meyer, Contributor on

Microsoft and BT are to launch an online marketplace for hosted applications, aimed at small-business customers.

The BT Applications Marketplace forms part of Microsoft's concerted push into the field of "software as a service" (SaaS), a delivery mechanism whereby software is remotely hosted and usually paid for on a monthly subscription basis, rather than hosted on a company's own server and paid for up-front.

SaaS is seen by some as ideally suited to the SME market because of the reduced risk it offers, as well as the way in which it lets customers quickly drop an application that is not working for them in favour of another. It also provides an opportunity for independent software vendors (ISVs) to access large corporations.

However, it is also seen as a threat by IT departments in some small firms, which note that purchasing decisions for SaaS are generally made by business rather than IT managers, and fear their jobs could fall victim to what is essentially a form of outsourcing.

On Wednesday Microsoft announced the launch of its "Partnering for the Future" initiative, involving the creation of a new channel of partners for the company ranging from application developers to telecommunications providers and hosting companies. The move follows on from the November introduction of the two-day SaaS Incubation programme, which is designed to bring software vendors, especially those developing applications on the back of Microsoft's Live platform, into the SaaS fold.

The Microsoft-BT linkup will be based on Microsoft's SOA-based Connected Services Framework (CSF) service aggregation platform. According to Claire O'Halloran of Microsoft's partner development group, applications that customers can expect to see include "commodity apps" such as those for human resources, CRM and payroll, but also niche applications geared at the likes of estate agents and dentists. One example of a vendor that seems likely to be part of the marketplace is Nitrosell, which supplies integrated e-commerce applications.

On Wednesday, O'Halloran said her team was currently introducing ISVs to BT and putting them through a "Dragon's Den" pitching process. Official registrations for the marketplace will open in March, and the service should become available soon after.

"BT has customer reach [and] we have a bunch of ISVs that have traditionally been more sales-led, but are wanting to move to being marketing-led," explained Karl Noakes, director of partner development and marketing for Microsoft. "There will be an element of survival of the fittest here, and customer demand will win out." Around 30 SaaS applications are expected to be available through the marketplace at its launch.

Those ISVs whose products prove particularly popular could see their products incorporated into BT's own portfolio under the BT brand, said O'Halloran.

Contacted on Wednesday afternoon, BT confirmed that Applications Marketplace was "something we're working on with Microsoft, which will be launched later this year", but declined to comment further at this stage.

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