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?