Given the recent good moves forward with Office Live (UK web site - http://www.officelive.co.uk, partners getting excited - Tim Long, bCentral information on the products and 5 amazing case studies) I thought I would share this further advancement in the online world.

There will always be a place for the small business products that rely on physical servers, but the business by Vlad and many others shows us that the SaaS (Software as a Service and Software AND Service) work well for a business model.

The difference between SAAS and SaS, IMHO, is one is rich in both client and web based tools, the other is ONLY rich when connected.  Take Exchange and Outlook - Outlook is a great client when connected to Exchange.  OWA is a great client too, however Outlook's offline ability is what sets it apart.  You can get get great online and offline experiences with SaS.

Microsoft and BT are to launch an online marketplace for hosted applications, with small-business customers as the target.

The BT Applications Marketplace forms part of Microsoft's concerted push into the field of "software as a service." In this delivery mechanism, software is remotely hosted and usually paid for on a monthly subscription basis, rather than hosted on a company's own server and paid for up-front.

In the marketplace, customers can expect to see "commodity apps" such as those for human resources, customer relationship management (CRM) and payroll, said Claire O'Halloran, of Microsoft's partner development group. But the linkup with the U.K. communications giant will also likely provide niche applications geared to the likes of realtors and dentists.

Around 30 hosted applications are expected to be available through the marketplace at its launch.

Source: Microsoft, BT hook up for hosted apps | Tech News on ZDNet