A primary reason why end users outsource applications, is the complexity of Microsoft's software licensing, according to attendees at a roundtable on SME outsourcing held yesterday.
The software then becomes a major problem for the hosting providers themselves.
At the roundtable, James Griffin head of hosting strategy for business focused ISP, Star, said that navigating this licensing issue was a minefield and that he expects it to get more complex. He said: "When we move to hosted desktops, it will be a completely different ballgame."
He added: "The people who buy our service provider (SP) license agreements - SPLARs (service provider license agreements resellers) - are among our most valuable resources. I spend more time talking to them than I do any of the other vendors and partners."
He added: "They're the secret medicine that we use to take end user's licensing headaches away. I have someone dedicated to sorting out all our SPLAR spend."
Freeform Dynamics research director Dale Vile said that one of the biggest things affecting 'on premise' users licensing problems was virtualisation.
"This technology shows up licensing issues in a big way. These issues make on premise rollouts for end users more difficult and moving to hosted services takes away that pain," said Vile.
Problems with Microsoft's software licensing came up in October last year when Microsoft chief executive Steve Ballmer addressed UK customers at the UK launch of Windows 7.
One question put to Ballmer at the event was: "I would appreciate your thoughts on simplifying the application licensing."
Ballmer replied, "if any of you have specific concerns regarding things you think are just too complicated...I encourage you to email me."