Software as a Service: Microsoft Jumps on Board

Microsoft Corp. is partnering with Compaq Computer Corp. and Digex Inc. to deliver systems, software, and services for application service providers (ASPs) and large Internet businesses.

In an announcement made last month, Microsoft ( and Compaq ( are investing $50 million each into Digex ( in return for Digex stock and to fund the deployment of these new Internet services.

Digex CEO Mark Shull says the number of ASPs is growing dramatically. "What [Microsoft is] doing is trying to transition their software from the client/server model to the network model. They're also trying to make it a rent model to allow [organizations] to rent applications on a user basis," Shull says. "As they transform their business, we'll be providing a well-documented platform to launch those applications. We'll have standard ways of monitoring that information and managing it."

The companies will work on a Digex-branded managed platform that is focused on implementations of ASP solutions. Goals will include dial-tone availability to these services and designing platforms that scale for the growth of online services in the future. The service will also provide up-to-date data via standardized XML interfaces to the organization's order, incident-tracking, security, and billing-status information.

Microsoft and Digex will codevelop software interfaces to make it easier for Windows developers to build ASP-ready functionality into applications. The companies plan the following components.

ASP Server Platform -- This component will advance automated provisioning and configuration of Internet-ready servers based on Microsoft Windows 2000 and Compaq enterprise-class servers, advancements in server resource monitoring and data management for improved reliability and recovery, and integrated administration and security tools.

ASP Application Platforms -- These will include hardened, tested, version-controlled software packaging based on Microsoft technology and designed specifically for commerce, messaging, and office applications for use on top of the ASP Server Platform.

ASP Partner Interfaces -- These standardized software interfaces, leveraging the XML and BizTalk frameworks of the Windows DNA platform, will allow sharing of critical business and server resource information to enable an ASP with up-to-date, actionable information to become a one-stop shop providing customers with a single-point of contact. This will provide an easy mechanism for Microsoft ISVs and application developers to ASP-enable their applications.

ASP Solution Certification -- A laboratory planned for development at the Digex center in Beltsville, Md., will be used to continuously optimize, tune, and test ASP solutions for scalability, security, and performance on the Internet.

Compaq will optimize its ProLiant Servers and StorageWorks systems for the Digex platform.

Thomas Koll, vice president of Microsoft's network solutions group, says Microsoft isn't balking at the revolution of Internet-based software, but embracing it. "Software as a service is a new environment in a market we have to address," he says. "Nothing should change for the users. They should get the same applications and richness on the client [as they do] in the PC environment."

The partnership will have significant implications for businesses moving towards the ASP model, says Martin Marshall, director at Zona Research Inc. ( "The lesson is that a $100 million, or even a few hundred million dollars, is small potatoes compared to the stakes of proving out Windows software and Intel hardware in the ASP market," Marshall reports. "Digex already has established a relationship with Sun to achieve SunTone certification and will now sit astride dueling efforts between Sun and Microsoft, profiting whenever either wins."