Microsoft today unveiled a new SaaS Incubation Center Program to help independent software vendors (ISVs) adopt the Software as a Service (SaaS) delivery model. Microsoft’s new program will provide ISVs with business and technical consulting services, a hosting channel to market, and incentive discounts to Microsoft’s enabling technology.

Not long ago, the incubator idea seemed to be a distant memory associated with the demise of the dot.com era. But, with the advent of a new surge of Web 2.0 opportunities, the incubator concept has also been reborn.

Microsoft isn’t the first to launch an incubation program in the SaaS space. OpSource, Salesforce.com, and others have created their own programs. What sets Microsoft’s program apart from the others is how it is attempting to link ISVs with hosting companies as a channel to market.

For the ISVs, this will give them a wider assortment of service delivery infrastructure partners to choose from. For the participating hosting providers, Microsoft’s program gives them access to a widening array of ISVs seeking to expand their customer base and drive revenue.

The SaaS Incubation Center Program will build on the Microsoft Solution for Windows®-based Hosting for Applications and the SaaS On-Ramp Program to give hosting providers training and tools to support the ISVs’ unique SaaS business and service delivery needs. The Microsoft SaaS Incubation Center Program will include a series of structured business consulting and software architecture training sessions. The Windows-based Hosting for Applications platform also gives hosters tools to more easily and effectively build and monitor their service delivery infrastructures and establish strong service-level agreements (SLAs).

The global incubator program will include seven hosting companies initially—Affinity, Navisite, NTT Communications, Opsource, Rackspace, 7Global, Siennax, Wizmo.

Microsoft also announced Phase II of its SaaS On-Ramp Program based on its Service Provider Licensing Agreement (SPLA) which gives ISVs discounted licensing for Windows Server® and Microsoft SQL Server™ licenses. ISVs can now acquire discounted SKUs for these servers through enrolled hosting providers, rather than just directly with Microsoft. This enables the hosting providers to offer an attractive combination of enabling technologies and delivery services to ISVs.

The key point of Microsoft’s announcement is that the company recognizes that its greatest differentiator in the SaaS market could be its ability to link ISVs with a channel to market. Channel opportunities and strategies have been a topic of debate in the SaaS industry. Salesforce.com’s AppExchange doesn’t address this issue and IBM’s SaaS efforts are still evolving in this area.

Microsoft is making a concerted effort to build a viable channel for its more than 20,000 ISV partners via hosting companies, as well as network service providers such as the telecommunications carriers and cable operators. You can expect to hear more about Microsoft’s SaaS enablement efforts in conjunction with the network service providers.