One of the three partners in esolutions, the "virtual" application service provider, says getting the venture off the ground has been harder than expected.
Esolutions was established by Microsoft, EDS and Telecom about 18 months ago, offering its first services a year later. Microsoft New Zealand head Geoff Lawrie says the alliance is not making Microsoft as much money as forecast.
"We're generating positive revenue but it's not as substantial as we expected at this point," Lawrie says.
"The reality for the ASP market is that it hasn't got the early acceptance that was being counted on," he says.
One of the least popular ASP offerings is proving to be Microsoft Office, which esolutions began making available on a rental basis last August. But Lawrie remains confident about the future of ASPs.
"I believe it is appropriate for the New Zealand market; there are at least a dozen credible players in the local ASP space."
He expects software to increasingly be delivered as a service and says Microsoft is providing building blocks to enable that.
Lawrie also says Microsoft New Zealand is creating a services business which last year did work worth "several million dollars", accounting for a claimed 4% of the market in which IBM's services organisation operates.