Despite its name, Office Live is not an online version of Microsoft's popular desktop software collection. Instead, it is a set of small business services, such as e-mail, Web hosting and contact-management software.
Microsoft says it's not opposed to the idea of expanding into online document creation, but that's not what small businesses are asking for, said Marja Koopmans, the software company's director of channel and business strategy for Office Live.
"They are saying 'I'm not looking to replace my desktop,'" Koopmans said. Businesses are more interested in software to close sales and add online marketing. "That's really what we are focusing on with Office Live. We don't rule out anything for the future," she said.
Rival Google acquired online word-processing company Writely in March and introduced spreadsheet software in June. It launched a combined Google Docs & Spreadsheets product earlier this month.
Microsoft first announced plans for Office Live a year ago, when top executives Bill Gates and Ray Ozzie convened in San Francisco to kick off Microsoft's Live era of software. At the time, Microsoft talked about 20 different online business applications, most prominently programs for Web page design, site hosting and e-mail access.
About 160,000 people have tried out the service in the U.S. since testing began in February. Microsoft is also going international with the program, with plans to test the service now in France, Germany, the United Kingdom and Japan. The U.S. service will exit the beta-testing phase on Nov. 15, Koopmans said.
One of the big changes since early testing is expanded business contact management software. Another is a program called AdManager, which lets small businesses manage online keyword-advertising campaigns. The initial test version of AdManager works only with Microsoft's own Windows Live Search, but Koopmans said the company would like to work with other search engines, both large and small. Some deals are "very close," she said.
"Larger engines are thinking about it, and (some) smaller engines are very close" to signing deals, she said.
Microsoft has been trying to expand both ad-backed options and online services to accompany many of its traditional software businesses, particularly those aimed at consumers and small businesses. On Tuesday, the company announced plans to introduce Office Accounting Express 2007, a free basic version of its small business accounting software.
Office Live will also be integrated with that new accounting software, Microsoft said. The tie-in is key, as it allows businesses to sell their wares through eBay, Koopmans said.
Microsoft is also touting Office Live as a chance for partners to build products that work with its services. It has a handful of partners already offering products, and 100 more just joined an early-adopter program. Microsoft hopes to woo more with a developer guide to be published in November.
For use of its Office Live services, Microsoft is offering both paid and free options. The free Office Live Basics includes a Web site with 500MB of storage, plus 25 company-branded e-mail accounts, each with 2GB of storage, and calendar tools through Microsoft Office Live mail. It also provides the Microsoft Office Live AdManager Beta test version, which lets users create search-advertising campaigns through Microsoft's Windows Live Search.
On the paid side, the $20-a-month Office Live Essentials adds a business contact manager and the ability for up to 10 people to share data in online workspaces that hold up to 500MB of data. It also includes an additional 500MB of Web site storage (for a total of 1GB) and 25 additional e-mail accounts. As an alternative, the $40-a-month Office Live Premium offers a total of 2GB of storage, supports up to 20 workspace users and expands the workspace storage to 1GB. Also included are a host of online business applications, such as project, document and time-management programs.
That's something of a shift from February, when Microsoft was talking about introducing another kind of paid service, focusing on online collaboration. That option is headed back for more testing, Koopmans said.
"We really need to learn more about that space," she said.