Microsoft’s Software as a Service (SaaS – no, it’s not a form of online flu) Unified Communications offering launched this month to relatively little fanfare, but the recession may speed its adoption by businesses.

Microsoft New Zealand National Technology Officer Roberts believes it’s still early days for the service, but argues the recession has accelerated the focus on it because of reliability and potential cost savings.

“I really do think that as cost-cutting in IT starts to bite, people will start looking at their infrastructure and they’ll start wondering, ‘why do we have this stuff in-house, does it still make sense to do that the way we’ve done it for the last 10 or 15 years, is it the way forward, are there better offers?’” he says.

Although it’s too early to tell what uptake is like yet – and Microsoft wouldn’t tell you anyway – it’s a fair bet people are starting to take online applications more seriously, particularly as a way to save money.

Moving IT infrastructure online or into ‘the cloud’ provides transparency of cost, with charging done on a per-user per-month basis which provides predictability. While you can trial Microsoft’s applications for free, there is a minimum 12 month subscription, but after that you can change your mind and move everything to another hosting service if you need to.

Mr Roberts argues that for a small business person who really doesn’t understand IT infrastructure, to be able to get that infrastructure provided as a service from their telecommunications provider is a great thing.

“It maintains one billing relationship, and it might be collaboration services built around Sharepoint, it might be email services... if they can access that under one existing billing relationship that’s attractive for a lot of those companies” he says.

Microsoft is allowing other companies to host their services, with Telecom launching a hosted version of Microsoft Unified Communications around September which you'll be able to subscribe to via Microsoft New Zealand's site, or Telecom's Business Hub site. Datacom, Rivera, and EDS will also offer their own hosting services.

Companies worried about the reliability of the service shouldn’t be – but the catch is, cost is part of that equation, as “the more nines you want to put on the end of the 99.9% reliability, the more it costs. But customers are quite happy to pay for that if it’s all done upfront”, says Mr Roberts.

Your data, offshore

Microsoft in New Zealand and Australia has its data centre located in Singapore with a backup in Hong Kong, which does raise some interesting questions. Microsoft owns the servers, “so we don’t co-locate with anyone. It’s our premises, our data centre, our staff - our everything”, says Mr Roberts, which presumably means they can’t get caught up in FBI raids on someone else’s business like this poor company did.

However, there hasn’t yet been a case to test which jurisdiction would apply if access to their servers was required by law enforcement agencies.

“There’s some interesting implications in there”, says Mr Roberts, “because, for example, I would imagine that local law applies in Singapore and Hong Kong. In a situation perhaps where a New Zealand law enforcement agency wants something done, or wants some information then obviously New Zealand law applies. And of course we’re a US incorporated company, so Washington State and US federal laws apply as well, so I’m guessing that it would be what lawyers would call ‘legally interesting’.

"Having said that, we as the owners of Hotmail for example, have for many years had very good systems in place to ensure that if law enforcement agencies wish to legally have access to something, or need evidence for a trial or something like that, we have some pretty clear processes in place where they can take advantage of that. And New Zealand law enforcement agencies have done so.”

Throw into the mix that privacy law is different in different countries, and you realise how bleeding edge the shift to this new technology is. Mr Roberts agrees that “It’s kind of all being done on the fly to a certain extent, and there will be all sorts of interesting situations arise, and that’s just the nature of the beast. It’s a fast moving industry, a fast moving technology, so you are going to get those issues and situations from time to time.”

SaaS is ultimately just another choice available to customers, one that is complementary to fixed infrastructure rather than a replacement, but for some customers, it will definitely offer lower costs and increased robustness over their existing systems.