Microsoft Launching Online Services

Microsoft has come to grips with the idea that customers want to consume software over the Web, and it is now poised to unleash its matchless market dominance on the world of online services.

Microsoft announced that it is hosting the following products available as subscription services: Microsoft Exchange Online, Microsoft Office SharePoint Online, Microsoft Office Communications Online, Microsoft Office Live Meeting, and Microsoft Dynamics CRM Online.

Microsoft is in fact offering two distinct types of services: a light version it calls the Deskless Worker Suite, to which customers can subscribe for $3 per user per month; and a more sophisticated suite of services for knowledge workers, to which customers can subscribe for $15 per user per month.

The latter includes:

•    Exchange Online for desktop and mobile e-mail and calendars with Outlook Web Access and full Office Outlook integration;
•    Office SharePoint Online for portals, collaboration, search and customized team sites;
•    Office Communications Online for instant messaging and presence; and
•    Office Live Meeting for Web conferencing and videoconferencing.

Click here for more details.

My colleague Joe Wilcox likes what he sees so far.

My initial response to the pricing, without doing a hard volume-licensing comparison, is positive. But Microsoft still charges quite a bit more than does Google for Apps, which are $50 per user per year. Microsoft's suite is $180 per user per year, assuming there are no hidden discounts or other devil-in-the-details considerations. 

The likes of Salesforce.com, Netsuite and Workday will likely feign indifference; they'll say Microsoft doesn't get multi-tenancy, hasn't built its applications for the Web, and is years behind the curve. But the truth is that if they aren't shaking in their boots, they ought to be.

Combine this offering with Equipt, launched July 2, and Microsoft is clearly taking aim at the same market segment that Google, Zoho and other SAAS vendors have been eyeing. Observers have assumed that as free and inexpensive online productivity tools and enterprise applications got "good enough," those companies would reap the benefits of Microsoft's aversion on SAAS.

Well, Microsoft has entered the fray, which means customers may no longer have to settle for "good enough."