Microsoft: Office Live Making Progress

"This is Microsoft's response to Google and has little overlap or potential to cannibalize its existing traditional PC and server licensing. Homes and small businesses are going to continue to have PCs and servers that need to be managed by solution providers, so the net impact on solution providers or MSPs at this level is neutral," he noted.

He also foresees that an MSP or solution provider's role as trusted advisor to customers will only grow going forward. Afte rall many small business—and even homes—will continue to field both on-site and SaaS services and someone will need to mangae that balance, he said.

Others are not so sure, but even partners who worry about Microsoft encroaching on their turf say Google's looming presence requires Microsoft to make these moves.

In an interview last year upon his ascension to the chief software architect post at Microsoft, Ozzie told CRN that it is not just partners, but Microsoft itself, that has to adapt to this new service delivery model.

"Whenever there is a change in architecture or a change in how things are deployed, there is opportunity in some way shape or form and anyone in any value chain -- that's Microsoft or any partners really -- should be looking at the environment and hopefully reshaping their business based on the opportunity," Ozzie said.

Later today, he is likely to expound on that subject again.

PAULA ROONEY contributed to this report.