Having played around with the OfficeLive Premium Beta (UK) for a few days, my first impressions are very favourable.

It certainly seems to tick all the SaaS 'must have' boxes identified in various posts on this site and seems very compelling from a micro/small business perspective.

I am pleasantly surprised at the level of sophistication and flexibility provided, particularly in the ability to create new simple 'business apps' and share and collect data from them across employee, customer and public site views. More than you'd possibly expect for what is likely to be around £20/month.

It certainly provides another significant leap in validating the SaaS model but also raises the bar for many ISVs and service providers.

Here is an interesting article about OfficeLive (and Google Apps) by Barb Darrow at CRN titled 'Hosting Providers Cast Wary Eye at Microsoft OfficeLive.  Talks about how OfficeLive has created a stir in the Hosting Provider and Broadband Provider community as they try and figure out what 'their' strategy is.  More in general about this concept, and how broadband providers could be the future of SaaS at www.broadbandevolved.com. 

Here is another article on OfficeLive titled 'OfficeLive Beta 2: Some Good, Some Bad, but Definitely a Sign of Things to Come'.

And some comparisons to other products in the UK market that BT and Microsoft are already partnering on, including BT Tradespace and BT Workspace.  More on this partnering here:  Microsoft and BT - Hosted Apps for SMBs