Microsoft is holding back from offering on-demand software applications over the Internet until the software industry clarifies important issues, such as pricing of these services.
While IT giants such as Hewlett-Packard and SAP are offering pay per use software online via major telcos in the UK and US, Microsoft says it is keeping its distance for now - with just one exception.
"How it will develop, nobody exactly knows. We're learning along with the rest of the industry," said Paul Maritz, group vice president of Microsoft's developer group in an exclusive interview with VNU Newswire at Microsoft Tech.Ed Europe 99 in Amsterdam this afternoon.
Application service providers (ASPs) are a new category of business that host applications, at their premises, that customers can use remotely via an IP network. BT is offering SAP applications online in the UK and Qwest is offering SAP applications in conjunction with HP in the US.
"We're making sure our technology can be used in those environments, so we can make sure that as the phenomenon develops, our applications are appropriate," said Maritz.
Microsoft is still pondering how it would charge license fees for on-demand software.
"The industry can still experiment with that," said Maritz.
"A lot also depends on how telecoms issues work out. A lot relies on bandwidth and boundaries - such as how organisations will tariff international bandwidth," he added.
What applications Microsoft will provide is also still unknown, according to Maritz. On one hand it could be email, while companies will also provide to the high end, with ERP applications.
Even though it has no firm plans in this area, Maritz says Microsoft is already an ASP in one market - through its Hotmail Web based email service.
"We're already outsourcing email for 50 million people," he said.
Microsoft has already made a minor commitment to the ASP market. In May it joined 50 other vendors as part of the ASP Industry Consortium, a group planning to drive standards for the ASP business.
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