Are Exchange Live and SharePoint Live just around the corner?

"Hosted," like "software as a service," is a term that different vendors and customers use differently.

To Microsoft -- for the time being at least -- hosting is all about the channel. Microsoft's Hosting business, part of its Communications Sector group, is conducted via service providers. But that situation is poised to change -- and, I'd bet sooner rather than later.

Via its partners, Microsoft currently makes available hosted versions of Exchange Server, Dynamics CRM, Windows Server, SQL Server, Live Communications Server and Microsoft Operations Manager, among other products.

But by the end of this year, Microsoft will field the first of what some partners are expecting to be a slew of Microsoft-hosted Microsoft products. Microsoft plans to release by year end a new Dynamics CRM 4.0 product, code-named "Titan," that the company plans to distribute in three ways: as an on-premise solution, a hosted solution (hosted by partners) and a software-as-a-service solution (CRM Live, hosted by Microsoft).

(Prediction: Microsoft will start calling CRM Live an example of Software + Service, as opposed to a software-as-a-service solution, setting the stage for other members of its S+S family.)

Earlier this week, Microsoft held a three-day Hosting Summit in Bellevue, Wash., for 325 partners from 160 companies. At the Summit, Microsoft announced updated versions of a couple of its products that are available to its partners to offer on a hosted basis: the Microsoft Solution for Hosted Messaging and Collaboration (HMC) 4.0 and the Microsoft Solution for Windows-based Hosting 4.5. These updates make use of new features in Exchange Server 2007 and Windows SharePoint Services 3.0. Both of these services are aimed at small- to mid-size business users, according to the company. The Windows 4.5 solution is available immediately; the HMC 4.0 one will be availble to partners some time in the next 30 days, Microsoft officials said.

Microsoft created a blog for the Hosting Summit, on which it provided commentary and video clips from the event. One participant wondered aloud about Microsoft's future hosting intentions. Matthew Baldwin, a senior architect with Affinity Internet, commented:

"One concern I have, that I'm sure others will have, is what Microsoft's intention is with entering into the market with their own hosted Exchange and SharePoint offerings (as Ballmer alluded to a few weeeks ago) and how exactly partners who already offer those services will play into their hosting ecosystem. Right now, I believe it would be prudent for hosting companies to look at the products they're offering and then build a tier on top of these products that ties them together to create an added level of value greater than what the user gets out of the box. A good example of a company doing this is SMBLive who have taken SharePoint hosting to a new level for the SMB. I think we'll eventually see the decline of hosters who offer out of the box services and move towards building integrated services."

Despite that caveat, Baldwin said he was jazzed by Microsoft's Hosting Summit demo of SoftGrid application-hosting -- and its potential to give Microsoft more reach into hosted desktop applications. Baldwin said:

"Another exciting demo was of SoftGrid.Microsoft showed off the ability to simply enable an application for a user in a domain and then the user being able to click on the application and have it stream directly to the desktop. There's no indication on how this will fit in with the hosting community and if there will be a facility for hosters to host their own SoftGrid platform and sell on-demand applications like Office, but this platform looks promising and seems to be Microsoft's answer (though there was nothing official here, either, just a guess) to Google's push into online office applications. Ideally, Microsoft will seek to partner with hosting companies and allow us to build out this platform not only for Microsoft applications but also for ISVs who want to move into a hosted model without having to rewrite all of their code."

Time to take bets: How long before Microsoft releases versions of Exchange Server and SharePoint Server that the company hosts itself -- i.e., delivers as Live services? In other words, when do you expect to see Exchange Server Live and SharePoint Server Live to debut from Microsoft?

My purely unscientific guess? End of 2007/early 2008 -- at least in pilot form.