Adding Another Piece to the Microsoft SaaS Puzzle
As I mentioned in my previous post, I’ve been traveling to a variety of software conferences where the discussion was focused on the implications of Software-as-a-Service (SaaS) and when this market will become fertile grounds for mergers and acquisitions.
Another aspect of the discussion has been a debate about how the major, established ISVs–Microsoft, Oracle and SAP in particular–will respond to the SaaS movement.
A recent acquisition by Microsoft has been relatively overlooked despite the fact that it offers some insight into Microsoft’s plans in the SaaS market.
On May 22, Microsoft announced that it is acquiring Softricity, a company which “transforms corporate computing by changing applications into network services that no longer need to be installed. The result is a highly scalable software environment that is securely deployed, managed and immediately available anywhere in the world.”
Sounds like SaaS to me!
Microsoft unveiled its acquisition at its the15th annual Microsoft Windows Hardware Engineering Conference (WinHEC), and suggested it will be an important piece of its virtualization strategy and future product roadmap. As a result of the timing and positioning of the announcement, it was seen as a virtualization play only aimed at combatting the escalating competition from VMware and others.
My guess is that it will also be an important piece of Microsoft’s SaaS plans as well.
Softricity was founded in 1999, and attracted a total of $63 million in VC funding including a $15 million round in 2005. The company reported that it employed 104 workers in February. At that same time, Softricity’s founding chief executive, Harry Ruda, was replaced by Art Matin who was previously the executive vice president of worldwide sales for Veritas Software when it was acquired by security giant, Symantec, in July 2005.
Although others are not paying much attention to Microsoft’s move from a SaaS perspective, I expect the Softricity acquisition to accelerate and broaden Microsoft’s entry into the SaaS market.
