Microsoft axes paid versions of Office Live Small Business

Microsoft is merging the three existing paid versions of its Office Live Small Business product into one and making that single version available for free, the company announced on February 11.

Office Live Small Business is the set of Web-based services, targeted at companies with 10 employees or fewer, that are designed to complement Microsoft Office. Since Microsoft rolled out the first version of these services in October 2006, they were available in three different flavors: a free, entry-level product (Office Live Small Business Basics); a mid-range offering (Office Live Small Business Essentials) for $19.95 per month; and a high-end service (Office Live Small Business Premium) for $39.95 per month.

Now there will be one combined, free offering, known as Office Live Small Business, that will supplant these three SKUs. Microsoft will offer add-on services to this free SKU for a monthly subscription fee, however.

One such paid service is Store Manager, a hosted e-commerce offering for $39.95 per month, that will help customers sell products on their own site, as well as on eBay. (Microsoft is planning to support other e-commerce sites with future releases, officials said.) Another example: Custom domain name and e-mail support, which will provide customers with private domain-name registration, plus 100 company-branded e-mail addresses, each with 5 GB of storage. Microsoft is offering that service for free for the first year and $14.95 per year after that.

Microsoft officials said they decided to eliminate the paid SKUs of Office Live Small Business as a result of customer feedback. When Microsoft first rolled out the service, customers wanted choice, claimed Baris Cetinok, director of product management and marketing for Microsoft Office Live Small Business. When Microsoft was working on the revamped Office Live Small Business line-up, customers said too many SKUs were confusing and they'd prefer a simpler, streamlined offering.

The new single SKU of Office Live Small Business, which will be available to customers starting today, adds support for Firefox 2.0 and synchronization with Microfot Office Outlook. Microsoft also  is making available to customers a beta of an e-mail marketing service, that will allow Office Live Small Business customers to send up to 200 e-mails for free (during the beta test process) to their customers for promotional purposes.

As of today, Microsoft's Office Live line-up looks like this:

For consumers: Office Live Workspace -- a service that will allow Office users to collaborate and share documents online.

For small businesses: Office Live Small Business

For enterprise users: Office Online -- the growing family of Microsoft-hosted services for larger users, including Office Exchange Online, Office SharePoint Online and Office Communications Online.

Microsoft officials have predicted the Office Live family will emerge within the next couple of years to be one of Microsoft's biggest and most prosperous product families.  So far, however, these services haven't taken the world by storm.