With all the hoopla this week about Google's OpenSocial play (which is great!), i'm willing to bet that this announcement by Microsoft about them delivering a beta of the Live SDK went practically unnoticed.
I agree with Mary when she says
It’s surprising to me how little Microsoft is doing to publicize the Windows Live APIs and tools that it is making available to developer .
I've written before about what a big move this is in my opinion. I think it would be a brave person to write off Microsoft in the SaaS space purely because of their experience in building a strong developer community and using this to their advantage. Granted they have a lot more competition – Google, Force.com and Facebook.
As ex-pat Kiwi (couldn't resist) Troy notes , other large ISV's are struggling with the disruption that SaaS poses. In my dealings with them, MS is doing the same. Schizophrenic is the word that springs to mind. But their moves in the SaaS space are undeniable and given this move, i reiterate. MS will be a serious player in the SaaS space