Microsoft to target SMB users with new 'BPOS Lite' cloud service

As part of its next wave of cloud offerings, Microsoft is working on a “BPOS Lite” productivity/collaboration suite that is aimed at small/mid-size businesses (SMBs).

Even though Microsoft currently hawks its hosted services to customers of any size, different offerings appeal more to different user bases.

For example, take BPOS, the Business Productivity Online Suite bundle consisting of Microsoft-hosted Exchange Online, SharePoint Online, Live Meeting conferencing and (in the future), Communications Online. Microsoft will sell its $120 per user/peryear BPOS subscription to customers of all sizes. But to date, the far and away biggest audience for BPOS has been large enterprise customers — Energizer, Coca Cola, Hilton Hotels, etc.

Microsoft also has a Microsoft-hosted offering at the very low end: The Deskless Worker offerings (hosted Exchange/SharePoint with many features turned off). But right now, it doesn’t offer a cloud-hosted productivity-suite/service for SMBs.

Microsoft is working on such an offering, however, that insiders currently refer to as “BPOS Lite.” Unlike BPOS, which is managed by Microsoft, BPOS Lite sounds as if it will be managed by partners.

I Googled Binged “BPOS Lite” after receiving a tip on it and found a couple of Microsoft job descriptions referencing its existence. From one of those postings:

“The IW (Information Worker) Unmanaged Services team is looking for an experienced product manager to launch a new set of Microsoft Online services to customers and through partners. The first offer - code-named BPOS “Lite” - is part of the “next wave” of services targeting professional individuals and smaller organizations, offering Microsoft’s best collaboration, communications and productivity services. Acquiring millions of BPOS-Lite customers across channels is core to MBD’s strategy to help achieve scale and compete effectively for services that ‘light up’ Office and extend the power of IW cloud services to our smallest and most numerous customers.”

It sounds as if there will be increased synergies between the BPOS Lite team and the CXM (customer anything management) — which I think is what Microsoft also refers to as XRM — team. That makes sense, given the xRM team is working with partners to try to get them to develop applications that build on top of the “guts” of Microsoft’s Dynamics CRM offering. xRM is key to what Microsoft is doing in what’s been called the  “platform as a service” space. Even though Microsoft officials no longer talk publicly about xRM as part of its overall Azure cloud platform, xRM-based applications are cloud-hostable.

Speaking of what is and isn’t part of Azure, Directions on Microsoft analyst Rob Sanfilippo had some interesting observations when I asked him for his take on when (and if) Microsoft might move BPOS and other related services to Azure. (They currently are hosted by Microsoft on a different internal cloud platform across various Microsoft datacenters). Sanfilippo said:

“It is unlikely that Microsoft’s online application offerings (Exchange, SharePoint, Communication Services, Live Conferencing) will be deployed on Azure for some time. Azure is currently geared for lower level Web services rather than for deployment of a full server product such as Exchange or SharePoint. It is possible that the two models will converge as Microsoft’s server products continue to be refactored to work in the cloud (that is, as more modular services) and as Azure offers more ways to host larger applications (such as the upcoming virtual machine roles). I don’t expect to see this kind of convergence for at least 2-3 years.”

Would you be interested in a BPOS Lite type of offering — whether or not it was Azure-hosted? What kinds of features, pricing and licensing would it need to attract an SMB shop, in your opinion? Oh, yeah… and in terms of reliability… given the BPOS outage that happened last week.