Microsoft moves deeper into the software services arena

Microsoft moves deeper into the software services arena

Summary: After a year or two of sticking a toe in the managed-services waters, Microsoft has decided to take the full software-as-a-service plunge -- at least for some of its enterprise apps.

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After a year or two of sticking a toe in the managed-services waters, Microsoft has decided to take the full software-as-a-service plunge -- at least for some of its enterprise apps.

Contrary to rumors circulating around the blogosphere over the weekend, the company is not rolling out a Web-based version of Office. Instead, Microsoft is expanding the scope of its Microsoft-managed business services around SharePoint and Exchange, as company officials told me under an embargo on Friday.

Until now, Microsoft was offering what it has branded SharePoint Online and Exchange Online -- a k a Microsoft-hosted versions of its SharePoint Server and Exchange Server products -- only to very large enterprise customers with 5,000 users or more. But on March 3, Microsoft will be opening up a beta of Microsoft-hosted SharePoint and Exchange (via which Microsoft hosts your service and your data) to companies of any size.

Microsoft officials are stressing that the company is not moving away from its "Software plus Services" strategy/branding, via which the company is offering customers a choice of running Microsoft software on-premise, via Microsoft partners and/or in Microsoft datacenters, hosted by Microsoft. But with this latest announcement, there's no denying Microsoft is accelerating its presence in the managed service space, which Google, Salesforce.com and others of its services-focused competitors dominate.

Microsoft has attracted a small handful of corporate users (lead off by Energizer Holdings) to pony up for Microsoft-hosted services. But starting March 3, customers of any size can request a spot in a limited beta for Microsoft-hosted e-mail, calendaring, shared workspaces, and web conferencing and videoconferencing. Microsoft officials said the final version of these standalone Microsoft-managed services will be available sometime in the latter half of 2008.

At the same time, Microsoft is prepping to add a third standalone service -- the Microsoft-hosted version of Office Communications Server (OCS) -- to the mix, with a beta of OCS Online due in the first half of 2008 and a final version some time in 2009. Microsoft also is working on a bundle of Microsoft-hosted business services, which it is calling its Business Productivity Online Suite. That bundle will include Microsoft-hosted Exchange, SharePoint, OCS and Live Meeting.

Microsoft has added a "provisioning layer" to Exchange and SharePoint to make them multi-tenant-ready, explained Eron Kelly, Director of Product Management for Business Online Services. And it is adding a new, per-user license subscription as a new pricing option for the forthcoming release of its Microsoft Online wares. Microsoft is going to allow customers who have purchased licenses for Microsoft's Exchange and SharePoint Server software (not the Microsoft-hosted versions of these products) to trade-in license credits for Microsoft Online managed service versions of these products; or a mix of on-premise and Microsoft-hosted versions.

Microsoft's greatly-expanded Online managed-services plan begs a couple of questions. First, will users trust Microsoft to host their corporate e-mail and other mission-critical applications and data? This is where Microsoft's S+S comes into play, said Kelly. Is Microsoft able to guarantee suffiicent uptime to entice users to use Microsoft-hosted version of key enterprise products like e-mail, collaboration and search?

Additionally, what happens to Microsoft's' reseller and systems integration partners in this scenario, where Microsoft is going to be hosting services in its own datacenters? Microsoft's position is that it has given its partners fair warning that they need to get out of the base-level hosting business and provide more value-added services.

What do you think of Microsoft's newest push into the Webified application space? Is it high time that Microsoft got deeper into the software-as-a-service space? Or are cusomters neither ready or willing to buy into Microsoft-hosted versions of their key enterprise applications?

Topics: Enterprise Software, Collaboration, Microsoft, Software

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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9 comments
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  • This is MSFT's ace in the hole

    What people and prognosticators don't seem to understand is that Microsoft has a serious advantage over Google and the like in that they can offer a choice of on-premises, hosted or a combination. Google has one option: we'll host it for you and you'll use a dumb-client (aka Web browser) to access it. In Microsoft's case they can offer Exchange as a hosted service and the end customer can use Outlook on the client. And, they can offer SharePoint as a hosted service and the end customer can use Office as the client. Or the end customer can host Exchange themselves and purchase add-on servicers (encryption, spam filtering) as a hosted service from Microsoft and their partners. Either way the customer has more options. With Google...well, you can use either IE or Firefox to access Google's datacenter.

    The web is an amazing thing. It's particularly good at providing easy access to data for users and applications. The Web is not the beset platform for end-user applications. The challenge for the likes of Microsoft and Apple is that users currently think that the hassles of installing and updating local applications isn't worth the hassle. That's a problem that they can fix. Once they do and are able to offer the proverbial best of both worlds of powerful client applications (on Macs, PC's, phones) then the neato wowie reations to AJAX-based browser apps will become...gee, that's sort of lame.
    marksashton
  • Microsoft Online Services vs Office Live?

    So help me out Mary Jo, how does this relate to the existing set of Office Live services, including Live Workspace? While I like the direction and the prospect of using SharePoint and Exchange on a subscription basis, at some point I'd like to think these assorted online services will come together in some logical way.

    And what about pricing? Any idea what the monthly subscription charge will be per user?
    spindruiz
    • Office Live

      Hi.

      Microsoft isn't talking pricing at all so far. So nothing to tell you there... (yet)

      Re: Office Live Small Business is the Microsoft product that is like a stripped-down SharePoint. (Office Live Workspace is more like Google Docs). So my guess is the lowest end offering (aimed at very small shops and consumers) is Office Live Small Business. The next step up will be Microsoft-hosted SharePoint Online.

      Mary Jo
      Mary Jo Foley
  • sleeping..

    :)
    par7133_z
    • And your point is?

      :)
      quikboy
  • I am so anxious..........

    To move all my data to a Microsoft
    server. Especially my credit card and
    bank account numbers. I know they
    will lock it down so even I will be
    lucky to access it, let alone
    hackers. Plus they can activate and
    integrate WGA into it, and wrap the
    whole ball of wax up in DRM, with no
    input (or output) from me.

    I completely trust them to insure
    that correct payment (arm? or leg?)
    is deducted from my accounts, before
    it becomes due, even.

    Heck, I won't even have to think
    about it! All I need do is connect to
    their server (whenever/ifever
    possible), and ask them nicely if I
    may please take a peek at my? data.
    Ole Man
    • So do I.

      I fully trust MS over Google to keep my data safe and not toss it out for adSense advertisers to get their hands on, or send it directly to the CIA servers.
      quikboy
      • What is sooooo funny

        is that you're serious as a heart
        attack!

        You're quik, boy! :-D
        Ole Man
  • RE: Microsoft moves deeper into the software services arena

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