At its Worldwide Partner Conference (WPC) this week in Denver, Microsoft plans to focus a strong spotlight on its forthcoming CRM Live service, the first of its enterprise applications to offer a fully featured hosted version. The move marks Microsoft's most significant embrace to date of on-demand software delivery -- a shift that makes some partners nervous about the potential sea change that looms.

"We do lot of business with Microsoft, but this is the one area where I don't think they've been very clear," said Dave Sobel, CEO of Evolve Technologies, a Fairfax, Va.-based Gold partner. "We've been successful partnering together, with them delivering software and solutions and us delivering services. I can certainly see how SaaS will fit in into this, but I'm still waiting to see what the final product will look like."

Several Microsoft channel partners echoed his concerns, telling CRN that the vendor hasn't communicated its software-as-a-service (SaaS) strategy well enough to assuage their fears. One solution provider noted that partners that depend on revenue from installation and configuration services revenue stand to lose out if Microsoft handles deployment directly, as it plans to for its CRM Live customers.