Did Gates-Ballmer Clash Stall Microsoft's SaaS Plans?

According to a Thursday report in the Wall Street Journal, in 2000, after Bill Gates handed over the title of Microsoft CEO to longtime friend Steve Ballmer, the two began butting heads to such an extreme that it began having an impact on the company's business.

With the help of other Microsoft executives, the two eventually patched things up. But according to the article, some Microsoft insiders believe the conflict between Gates and Ballmer was partially responsible for the foundering of the NetDocs project, Microsoft's early effort to deliver applications as online services, which died in 2001.

Seven years later, Microsoft has unveiled a handful of consumer services, is starting to roll out online versions of apps like Exchange and Sharepoint, and has unveiled a strategy -- called Software Plus Services -- for moving to online application delivery without abandoning on-premise software.

What Microsoft hasn't done, at least in the opinion of many of its channel partners, is clearly articulate the business model around services, and how VARs will fit into it.

Imagine if NetDocs had succeeded, and Microsoft had spent the past seven years figuring out how to keep partners happy with symbiotic service revenue sharing terms, and was delivering its entire portfolio of apps online. In such a scenario, Microsoft and its channel would now be making money hand over fist and marching gleefully together into the Software Plus Services future.

But right now, there are more questions than answers with regard to how Software Plus Services will play in the channel. And next month at Microsoft's Worldwide Partner Conference, where Ballmer is scheduled to deliver a keynote speech, channel partners will no doubt be peppering Microsoft executives for what many feel are long-overdue details.