Microsoft Expands Its Online Services

SEATTLE—As Microsoft ratchets up its software-plus-services offering, the company will use its annual Office SharePoint Conference March 3 to announce that it is expanding its existing online services to businesses of all sizes. 

Microsoft now plans to offer hosted Exchange Online and Office SharePoint Online together with Office Communications Online and Office Live Meeting, either as a suite of services or as individual service offerings,  Eron Kelly, a director in Microsoft’s business online services group, told eWEEK ahead of the conference.

Microsoft made its online services available to businesses with more than 5,000 users last September, and this announcement extends those services to businesses of all sizes.

The software giant will also announce a limited beta trial of Exchange Online and SharePoint Online to customers of all sizes March 3.

These services are expected to be generally available to businesses in the second half of the year, while the beta for Office Communications online will be available in the second half of this calendar year and available in early 2009.

The move is the first step in Microsoft’s bigger plan of making all of its software and server products available as a service, either hosted by the software company and its partners, or on-premises, Microsoft Chairman Bill Gates will tell attendees in his keynote address at the conference March 3, Kelly said.

Read here Joe Wilcox's take on Microsoft's hosting strategy. 

But to Keith McCall, a former Microsoft executive and now the chief technology officer of Azaleos, which provides a managed on-premises Exchange solution, the primary driving force behind this push is for Microsoft to be able to compete with Google, which has been making inroads with its hosted e-mail offering.

“Both Microsoft and Google are stampeding to deliver hosted off-premises services, and partners in the path will have to get out of the way or get flattened. This is direct and clear competition and a channel conflict with those partners who have all offered hosted Microsoft Exchange via Microsoft’s Service Provider Licensing Agreement,” he said.

Microsoft’s new “resale” agreement likely will not be well-received by those hosting companies that have had to build up significantly costly infrastructures to support their customers, McCall said.

While Microsoft’s Kelly acknowledged that these services could compete with some of the company's current partners, most of those partners were already looking at ways to differentiate themselves and their offerings from what will be a standardized offering from Microsoft, he said.

With regard to its existing hosting partners, Kelly said they will provide more customized experiences that are specific to certain verticals and integrated with their other services.