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Microsoft's Big Plans for Hosted Services
By Michelle Savage

July 8, 2008 — Microsoft’s plans for its suite of Web-based services were unveiled today at the company's Worldwide Partner Conference in Houston.

Microsoft wants corporate customers to stop using in-house computer systems and switch to "cloud computing," which it touts as a “cost-effective” solution for businesses of all sizes. While, in the past, Microsoft has relied on selling software that runs on individual computers and servers, it has invested billion of dollars in massive data centers, which support its new portfolio of Web services.

Now customers have the option of letting Microsoft run their e-mail, collaboration or sales programs and delivering those applications over the Web for a monthly fee. "Our vision is that everything you can do with our onsite servers, you will be able to do with our online services," said Stephen Elop, president of the Microsoft Business Division.

Microsoft Online Services delivers software as subscription services to businesses of all sizes hosted by Microsoft and sold with partners. The software includes Dynamics CRM Online, Exchange Online, Office SharePoint Online, Office Communications Online and Office Live Meeting. Elop said that Microsoft is increasingly seeing customers, partners and even competitors embrace this flexible approach to the cloud.

Forrester’s James Staten said that an increasing number of smaller companies are using cloud technologies as a low-cost, no-commitment way to get new services and capabilities to market quickly. And while large enterprises are hesitant to use cloud solutions for mission-critical applications, most are experimenting with ways to use cloud computing, using it internally for research and development and quick-hit projects, he said.

The number of competing vendors is high. Amazon, Google, Hewlett-Packard, IBM and Salesforce.com are just a few of the many vendors offering a wide variety of cloud offerings, ranging from Internet search and social networking services to services that predict market trends and tailor pricing.

With competitive pricing models, Microsoft is moving aggressively to position itself as a leading hosting provider. For US$15 per license per month, Microsoft’s online business productivity suite offers an Outlook-integrated Exchange Online for e-mail and calendars; Office SharePoint Online for collaboration; Office Communications Online for instant messaging; and Office Live Meeting for Web conferencing. Microsoft will offer these services in yearly, automatically renewing agreements, bringing the cost to $180 a year.

Customers can subscribe to individual services offered by Microsoft Online Services, but the bundled solution costs 38 percent less than the $24.25 per month per user those services would cost separately. In addition, Microsoft Dynamics CRM Online, an on-demand customer relationship management service hosted and managed by Microsoft, is available for $44 per user per month.

The Microsoft Online Services lineup includes two new suites of subscription services available for an additional $3 per month that will enable telecommuting and address the needs of “deskless” workers, which Microsoft describes as “those people who typically spend a small portion of their workday using a computer but still need to communicate and collaborate with colleagues and partners.”

The new suites are Exchange Online Deskless Worker, which includes mail, calendars, security filters and Outlook Web Access Light; and SharePoint Online Deskless Worker, which offers access to internal company sites and search.

Exchange Online and Office SharePoint Online are still in beta, with final availability slated for the second half of 2008.

Related Search Term(s): Cloud computing, networking, Microsoft

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