Contrary to the general belief that enterprises will leverage software-as-a-service (SaaS) on a pay-per-use model and shy away from managing applications in-house, Microsoft's GM of Marketing and Operations, Tarun Gulati says that both the software and web-hosted services will co-exist. He thinks that CIOs will choose a combinations of both - instead of opting for either one.

How do you see S+S panning out differently from the conventional software-only or services-only approaches?

If you look at the different waves of computing that have arrived till date, the ones that really changed industry dynamics started with the mainframes in the early seventies. It was followed by the client server model, which revolutionized the industry. It was followed by the Internet and a Web-based model. We believe the next wave of computing is going to go primarily around the Software + Services approach. It is not going to be an either-or scenario. We are seeing the three buckets of consumers - enterprise, SME and the individual consumer - choosing platforms that are going to help them to have the best of what is available online. This gives them advantages such as the ability to get onboard at the earliest, deploy software, achieve faster time-to-market, and easy affordability with the subscription-based model.

We believe that the world is going to choose an interesting combination of software and services. It is also never going to be polarization where everything will move to cloud computing. People will still need a lot of things to be done when they are offline and have much more control. Moreover, a lot of investment has been made in deploying current technologies, which cannot be suddenly ripped out to be hosted on an online environment.

Is the S+S concept a stepping stone to the realms of cloud computing or an alternative?

SaaS is a software delivery mechanism and not a platform paradigm. The infrastructure to build and run such a delivery mechanism is what I will define as a cloud computing platform. So, SaaS is a channel and how this channel can run, can be configured and can be monetized is all about cloud computing. In other words most of the buzzwords we hear today are manifestation of the same concept of service offerings.

On the other hand, S+S is a platform paradigm. It reflects how people are going to consume software going forward. With our online suite of offerings, we are currently talking about online versions of our Exchange, SharePoint and Unified Communications stack of software. Going forward, most apps will slowly start to have services-component built in them. This will give enterprises more choice in consuming software. Whether they want the full control or they would like to consume the software as a service. Or, they would like to choose a hybrid model, where certain elements will be deployed locally and the rest are hosted on a cloud environment, depending upon what problems they are trying to solve. We have for example, Exchange Online, which has shared APIs and configurability built across to be deployed as a service to enterprises.

Currently, cloud computing can free up an organization from IT complexities but does not allow a CIO to choose which infrastructure to opt for. How is Microsoft's Live Mesh, which leverages its Software + Services strategy, any different?

The offerings, which are available today are designed from consumer, SMEs and small ISVs standpoint, and not from an enterprise perspective. For CIOs, these offerings do not even come with SLAs. However, going forward, when the game shifts towards enterprise, the degree of control and compliance, which make CIOs comfortable, will vary. People will want to plug out existing apps, virtualize them and put on a cloud. Folks who can combine managing enterprises better and virtualizing their apps to run on a cloud, will do better in the future.

We believe that everybody is talking about software plus services. Even our competition. The good thing is that we have a much bigger legacy to win in this game. Our software legacy is pretty high and we have a very good way to go ahead in building the services arsenal mapped around the software to provide the best of both worlds.