If you have been to any Microsoft event over the last 12 months, you could not escape the term “Software + Services”. But what is it? Why should you consider it?

For me, “Software + Services” is an approach that makes the best use of Web 2.0, SOA and SaaS in that it allows a company to concentrate on what they do best and build applications around their own expertise and processes, then leverage specialist applications like virtual earth, google maps, photosynth (amongst others) to deliver a deep, rich, powerful user experience that previously would have been simply too expensive to create. (There is more here)

But it’s not just the richness of functionality that provides a strong argument for incorporating services into your applications – there are many other reasons such as quality and cost. However, one of the most compelling arguments that I see is in business agility and time to market. Many new businesses today are under pressure to prove the business case and deliver a return on investment from technology quickly. For this reason, they simply do not have the time to invest in a major platform build.

At this point there are 2 things that I would look at:

What are my short-term tactical needs?
How does this fit with my longer term strategy?

Tactical needs, in a lot of situations, can be addressed with limited development through cloud services. This is attractive for a young business, where there tend to be limited capex budgets and a strong focus on minimising costs.

However, as a business evolves, its requirements become more complex (driven hopefully by its success) and it is at this point a business should have a sharp focus for being able to maintain control of its IT. This usually means that demands on the system dictate that it should be brought in house, or farmed out to a more appropriate managed service provider. This is where traditional SaaS providers tend to be an issue, as services such as Salesforce.com have little room to move. Personally, I feel this is where Microsoft is almost unrivalled in their ability to deliver a vast breadth of applications – available in the Cloud OR in your office; although they are clearly not the only provider.

So next time you are looking at a project, I would advise you to seriously consider what is available both off the shelf AND in the Cloud : and more importantly how it fits with the journey you want to take.