This offering is again a great illustration of the main architectural patterns advocated by MS:
- OBA: the knowledge worker has the CRM functionality (including WF) available at his fingertips from within his familiar MS Office/Outlook UI (also from browser and mobile client)
- S+S: the CRM Live offer is available as a pure SaaS model but for customers who choose so this offer can be enriched with software running locally (i.e. in Outlook or off-line data). Beside that aspect the offering also includes a deployment model where the CRM software runs in the cloud (hosted by third-party or MS) or can run on-premise.
Note that all Dynamics CRM solutions rely on a single multi-tenant code base, enabling easy migrations across on-premise or on-demand deployments.
See http://blogs.msdn.com/crm/ for more info.