Well so much for the earth shattering news. The much discussed MS announcement regarding SaaS products this week amounted to an extension of its hosted SharePoint and Exchange offerings. As ZDNet commented, Microsoft Online Services is “about maintaining the base of the small businesses and department-level buyers of Microsoft products. In essence, this is defense.”

Phil Wainewrigth is suitable smug saying;

The blogosphere wants nothing less than Microsoft Office (or Works, at a push) hosted in the cloud just like Google Apps. I promise you, it ain’t gonna happen. Not until Microsoft is finally dragged kicking and screaming into the on-demand era, sometime in the next decade..Office in the cloud? Steve Ballmer will lose his job before that happens. Shifting the Office cash-cow into the cloud on a monthly subscription basis would drive a stake through the center of Microsoft’s business model.

In the meantime, expect nothing but disappointment if you think Microsoft is going to shift any of its desktop products into the cloud any time soon.

Over on Smoothspan, Bob isn’t smug but reminds us that MS and SaaS won’t be a quick moving relationship;

In particular I wonder if the investment community is ready for new shock waves after the Yahoo ordeal.  It could be that Microsoft is thinking discretion is the better part of valor until that saga is done.

Change takes time when Microsoft is concerned it would seem…