"A history of delivering premised-based software means they will be vulnerable to customer attrition which is a big consideration in SaaS because they are not tied to the old software model," he said, adding that access-driven models demand customer focus.

Responding to the claims, Microsoft Australia business solution product manager, Ross Dembecki, admitted there may be some difficulty for premise-based software vendors, but Microsoft won't be one of them.

He cited Microsoft's Hotmail and the upcoming CRM Dynamics Live release as proof of the vendor's ability to adapt.

"Traditional on-premise CRM vendors are likely to have a hard time offering SaaS because of lack of experience in scalable, reliable Web-based service delivery," Dembecki said.

"However, Microsoft has a rich history in building and operating massively scalable data centers like MSN Hotmail, while the new SaaS Windows Live data center will host Microsoft Dynamics CRM Live as an alternative to our on-premise Microsoft CRM."