Microsoft Readies New Hosted Services for SMBs

In his annual memo to employees, Microsoft's top exec gave a hint at some of the many hosted services for small businesses the company has waiting in the wings.

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Microsoft Corp. soon will launch a number of IT services developed together by the MSN, Windows and Office teams that are aimed at small businesses and consumers. Or so foreshadowed the Microsoft CEO in his yearly virtual address to rally the troops.

Buried in CEO Steve Ballmers annual employee memo mailed to the companys 57,000-member-strong workforce on Tuesday is a brief mention of the new services.

"The MSN, Windows and Office teams are working together on a set of integrated IT services for smaller businesses and consumers to enhance security, lower costs, and improve the end-user experience in areas such as communication, collaboration and desktop management," Ballmer told employees in his missive.

Yusuf Mehdi, corporate vice president of the MSN Information Services and Merchant Platform division, recently foreshadowed some of the new Microsoft services likely to be part of the forthcoming collection.

In Late May at Goldman Sachs fifth annual Internet conference in Las Vegas, Mehdi told institutional investors that MSN is working on advanced e-mail and small-businesses services that it is expected to launch any time now.

Microsoft is expected to make such services part of its MSN Premium bundle as well as available individually.

Bruce Jaffe, the chief financial officer for the MSN division, provided additional details when he addressed institutional investors at the Deutsche Bank Securities Media Conference in New York in early June.

"Our first product here is going to be using Outlook that uses the Hotmail e-mail infrastructure. So you dont need to have an Exchange Server if youre a small business; you can just use Hotmail and you can have that synchronized experience, as well as the calendaring and everything else with other people who are on Hotmail. So thats taking some desk applications and services and bringing them online and marrying them with our communications back-end effort," Jaffe told conference attendees.

Jaffee also talked up future MSN services on tap, including a personal-information manager service that would provide advanced calendaring; and new blogging services, including blog hosting, blog, authoring, blog sharing and blog searching (presumably using MSNs MSNbot capability).

/zimages/3/28571.gifClick here to read more about forthcoming search and blog capabilities.

Microsoft could also could hosted security services as part of its forthcoming IT Services smorgasbord.

Microsoft completed in early February the test phase of its so-called "PC Satisfaction Trial." The private trial, which commenced in the spring of 2003, was designed to test Microsoft and third-party anti-virus, firewall, backup and PC-health-monitoring services. Sources said that Microsoft was testing whether these kinds of security services—when provided as hosted, managed services—would appeal to typically less-security-savvy small-business and consumer customers.

Microsoft did not respond to a request for comment on specifics on the IT services mentioned in the Ballmer memo.

Meanwhile, Microsoft has been seeking ways to grow its stable of subscription services for several years now. Microsoft scrapped its .Net My Services (code-named "Hailstorm") initiative—via which the company planned to make e-mail, calendaring, contact-management, and other services available on a hosted basis—in 2002.

Since then, the company has added new MSN Premium services, like photo-management, money-management and personal reference, to its line-up. It now sells Hotmail Premium, MSN personal domains and MSN radio services via subscription, like it does its Xbox Live gaming services. And just a couple of months ago, Microsoft added new paid subscription games to its MSN 6.2 platform.

(Editors Note: This article includes information that originally appeared in the June 10, 2004, issue of the Microsoft Watch newsletter.)

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