Available through Microsoft's service provider licensing agreement, the SaaS On-Ramp program provides independent software vendors with discounted software infrastructure and technical resources to help develop and deploy their applications.

Microsoft says its program helps lower initial set-up risks and costs by offering two of its core components of software, Windows Server and Microsoft SQL Server, at a reduced price for the first 12 months after signing up, which delivers a total of approximately 80 percent in savings.

Micrsoft says ISVs developing new software as a service offerings can receive the Windows Server license for up to eight CPUs and Microsoft SQL Server license for up to two CPUs. Vendors can take advantage of Microsoft's SPLA agreement enabling ISVs to license Microsoft products on a monthly basis and offer services and hosted applications to their end customers, which include access to the latest versions of Microsoft software, the ability to grant customer demos for 60 days and 20 licenses for data center administrators at no cost.

Michael van Dijken, lead marketing manager for hosted solutions at Microsoft's Communications sector, says an ongoing conversation with some 75,000 ISVs in Microsoft's partner program and demand for a more cost-effective way to deploy a SaaS offering helped with the development of this program.

"We work with several ISVs that are already on the SPLA program, and listening to their concerns and the things they struggle with as they move into the SaaS realm, we came up with the On-Ramp program," says van Dijken. "It also mimics something we did several years ago with the ISV Royalty Program. We gave companies that were looking into developing software and writing applications special pricing on a set of licenses for the first 12 months as they kind of got into the ISV world. So, this is a very similar type of program but it goes from traditional software delivery to SaaS delivery, and hence the vehicle is the SPLA."

Microsoft says the SaaS On-Ramp program is currently available in North America and Europe and will be launched in Asia in February 2007. To get involved in the program, ISVs have to sign a service provider licensing agreement with Microsoft or a Microsoft reseller. Van Dijken adds that within the next couple of months, Web hosting providers will be able to provide the licensing directly to the ISVs with a single packaged price, so that ISVs won't have to sign a SPLA with Microsoft.

Van Dijken says Microsoft's SaaS On-Ramp program is just one component of a broader set of initiatives from Microsoft surrounding software as a service, and that the company is following the natural evolution of the software industry.

"I think that there is little doubt that software as a service is something that is being rapidly adopted," says van Dijken. "Over the next two to three months you can expect to see more similar announcements from Microsoft with regards to Web hosts that are trying to target this segment. You can certainly look forward to more of how Microsoft will help ISVs, not just with creating and hosting their applications, but actually getting it out to market, which is a very different model for them compared to traditional software delivery, or packaged software. Microsoft has always worked very well with ISVs and our goal is to continue to help them be successful on the Microsoft platform, so this is an excellent opportunity for them."