http://www.theregister.co.uk/2007/04/20/desktop_office_suites/ caught our teams eye. It is a survey of desktop software of over 4800 folks and draws a few interesting conclusions.

Firstly on SaaS:

"The other big news from this chart is that online alternatives to desktop office suites delivered via the "software as a service" (SaaS) model are really nowhere at the moment in terms of penetration, at least for business use. With all the noise we hear about these types of services, this may come as a bit of a disappointment for SaaS and Web 2.0 advocates. Clearly, the tales that Google is already beginning to threaten Microsoft's desktop dominance are wildly exaggerated."

SaaS has a lot of noise behind it - but lets be perfectly clear on this -  there are real success stories as well. Ultimately - some applications fit perfectly with the simplistic view of SaaS right now, namely SaaS=Web Browser Applications. Some do not - such as desktop productivity suites where the real strength comes from having several applications integrate so well. For an ISV, SaaS remains a big threat/opportunity. Do not ignore it...

Secondly on office suites as containers:

"Related to this, the results also lend support to Microsoft and IBM's assertions that applications like Notes and Office/Outlook should be viewed as "containers" for surfacing application functionality from other systems – e.g. the notion of embedding access to an SAP expense management system or a room booking system into whichever application is already central to the user's desktop"

I think for surprisingly many ISV applications the primary user interface should be built for the office suite already in use within their customers sites. The challenge is that even with Office 2007 it remains harder to do  than writing your own container. We are working to make this easier with better guidance and with improved development tool support for Office 2007 in Visual Studio "Orcas"