Microsoft still advocates their Software plus Services strategy. And they do have a point; some software will always require to be installed and executed locally. More advanced software like Adobe Photoshop is an obvious example, but even software that has plenty of web alternatives such as Evernote can benefit from having a desktop client. But for most productive business software that I use web applications offers much greater benefits for me, and for a large business the benefit of not installing and maintaining desktop clients is important.
Other than Microsoft themselves and a few of their Gold Partners there aren't many software vendors rushing to offer web-aware desktop clients (aka software plus services). On the other hand some web applications has addressed what is perhaps the greatest weakness with SaaS. And something that Microsoft emphasize as one of their key advantages with Software plus services or Software as a Service: offline capabilities. Until Google launched Gears 2 years ago going offline was indeed a problem. Gears started with providing a local database for storage which provided web applications the ability to work offline. Later Google has introduced WiFi-based geolocation, multiple file upload, search engine and has planned further features to allow web applications utilize local hardware.
Gears has off course been implemented by many of the Google projects but it has also been embraced by a few other web applications such as Zoho, MySpace and WordPress. So far it has gained no support by web applications aimed at the enterprise segment or any business critical applications such as CRM, invoicing or accounting. I am quite surprised at this as offline access is quite important for many potential SaaS customers. If SaaS vendors could offer that it would result in even fewer hinders when acquiring new customers.
Gears has made the foundation for effectively killing of Software plus services in most business software. What do you think; do we need software plus services or is SaaS+Gears the solution?
Also read Krishnan's post today along similar thoughts.