Certainly “Live” is the latest buzz word and Microsoft responded to this renewed phenomenon in a big way. That is certainly going to fuel “Software-as-Service” concept further. One thing that I love about Microsoft is that it’s collective ability to recognize and respond to the new trends early enough and morph for future success. In that there is never a question about “Innovator’s dilemma”.

Nevertheless, does “Live” mean “dead” for every other software model?. I don’t think so.
There is a great analogy in Automobile industry. Five or ten years before there were dreams about cars that would run on water or electricity. I was certainly looking for a car that would fly me to my work (and avoid the traffic jam :) ). But today what has become real and tremendously successful are the hybrids and I certainly own one and proud of it. 

So I think “Software-as-Service” is going to add value to the traditional on- premise
software,  but certainly not going to replace it completely. It is going to be more effective and useful where the traditional software TCO is high and needs constant update and intelligence over wire to keep it effective, like my hybrid car which switches to electricity on a slow city traffic, but I love and need my “gas” engine when I am on the high way.

In “Web 2.0”, people most often think of AJAX, RSS as key themes, which is unfortunate. These are just user interface and application interfaces for web applications.The focus should be more on making web really the platform of platforms, which would allow people to develop, integrate, deploy and use applications that brings down the TCO and harness the collective community knowledge and enables distributed collaboration. Most of all it should make the applications simple and easy to use. “Simple” is the key to success.