DALLAS -- Will Microsoft ultimately get into the CRM and ERP hosting businesses, all in the name of "CRM Live" and "ERP Live"?

Microsoft channel partners already offer hosted versions of Microsoft's CRM and ERP applications. And Microsoft announced on Monday some enhanced CRM 3.0 hosting programs for partners to its stable of offerings, including a new CRM Professional Edition for service providers.

Those same partners, customers and company watchers all have speculated that the Redmond software giant is planning to offer itself hosted versions of its Microsoft CRM, Great Plains, Navision, Axapta and/or Solomon wares.

Microsoft officials have been cagey about its intentions there. But company officials have made no bones about the fact they are planning software-as-a-service-style offerings that will fulfill the company's broader and evolving "CRM Live" and "ERP Live" visions.

Increasingly, however, Microsoft looks to be planning a very different route than other players in delivering software as a service.

"Software as a service (SAAS) is a very important trend," said Microsoft Chairman Bill Gates during his Monday morning keynote at the Convergence conference here. "We believe in it a lot."

Not surprisingly, unlike Salesforce.com, which has built its business around the idea that "software is dead," Microsoft isn't equating SAAS with hosted software. Microsoft is pushing the idea that partners and customers want a full spectrum of offerings, ranging from traditional on-premise software, to services, to a hybrid.

Our software is offered "on a server basis and service basis," Gates said. "We don't think there will be a swing from one model to another model. As users get smaller in size, maybe the off-premise gets relatively more attractive. We just want to give people that choice."

Microsoft Business President Jeff Raikes echoed the same sentiments.

"Our first priority (in delivering software as a service) is the kinds of things represented by Office Live," Microsoft Business President Jeff Raikes told Microsoft Watch during an interview at Convergence.

"Our next priority is what we have in the CRM area" with our partners hosting CRM solutions," Raikes added. "Our partners want a combination (of software and services). Whether it's our servers or theirs is not the biggest issue for them."

Raikes added that "I haven't heard from customers that (hosted ERP) is really a priority."

The bottom line, Raikes said: "I've gotten no pushback (from customers) on whether Microsoft hosts these things or doesn't."

Given this climate, what will CRM Live and ERP Live be more likely to look like?

"Business mash ups" and other kinds of composite applications also can be considered to fall under the Microsoft Live banner, too, said Microsoft Business Solutions Corporate Vice President Satya Nadella.

"Live isn't just about hosting. It's also about mash ups. The real idea of Live is exposing the business logic. And there are lots of hybrids, like the recently released RSS generator for CRM, which can be very powerful for thins like lead sharing and visibility into the CRM pipeline."

Nadella emphasized that there is a whole spectrum of business mash ups emerging from Microsoft, its partners and its customers.

"Mash ups are usually light, visual composite applications," Nadella explained. "But there also are more complex mash ups that are more like full composite applications where there is programming required, SharePoint used, and the like."

There also will be mash ups with Web services – like combining Craig's List or PayPal with Microsoft CRM and/or ERP offerings. Microsoft also is encouraging mash ups between its own ERP and CRM products and its competitors offerings, via a new set of connectors, the first of which were announced at Convergence on Monday.

Microsoft also is experimenting with mashing up its other Live offerings, such as various Windows Live and CRM Live services, with Microsoft CRM and ERP products, Nadella said. Microsoft is looking to build out some Windows Live Gadgets that can talk to Microsoft Business Solutions' Web services, Nadella added.

"Microsoft always succeeds in markets where we allow others to build on us as a platform. What we don't know is the kinds of composites that customers and partners will build on top of us," said James Utzschneider, general manager of Microsoft Dynamics.