In another sign that its basic business model is changing, Microsoft is offering its major products for e-mail and collaboration to corporate...
In another sign that its basic business model is changing, Microsoft is offering its major products for e-mail and collaboration to corporate customers on a subscription basis.
The company announced its Online Services plans last fall with a test of the offering for large businesses with 5,000 employees or more.
Today, Microsoft Chairman Bill Gates is expected to announce that the program will be open to companies of all sizes by the second half of the year.
Microsoft’s hosted Exchange and SharePoint services would be an alternative to the traditional model for enterprise software in which a company buys licenses for a product and runs it on its own servers.
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With hosted services, a third-party runs the software remotely and the company accesses it via Internet connection, paying a subscription fee per user.
Microsoft isn’t doing away with the old model but rather giving customers an option. Customers will get credit for licenses they’ve purchased for on-premises software should they switch to the hosted versions.
Microsoft’s huge network of partners — the system integrators, resellers, consultants and others through which most of the company’s sales flow — has been hosting Exchange and other products for years, and the company is trying not to step on their toes.
John Betz, director of the Online Services group, said there are many opportunities for partners to build specialized practices around Microsoft’s hosted services.
“We still rely on partners to provide that to our end-customers,” Betz said. “We’re committed to selling these new services with our partner channel.”
For SharePoint — server software used for internal company Web sites, project management, collaboration, business intelligence and several other functions — the old model has been successful. Since its debut in 2001, the product has racked up $1 billion in sales and is used by 100 million people.
“This is the fastest-growing server product in Microsoft’s history,” said product director Rob Curry.
But it is not without competition ranging from free, lightweight Web applications to major software vendors, including IBM.
Last week, Google launched a revamped version of JotSpot, a collaboration tool it acquired in October 2006. Called Google Sites, this hosted service is targeted at small and medium businesses and organizations, including schools.
The software, which has several features similar to SharePoint’s, would compete more directly with Microsoft’s new hosted option rather than its on-premises offering. Microsoft dismissed Google Sites as unfit for large businesses.
“We’re seven years ahead of them in this arena and don’t see them as a threat here,” Curry said.
Google added Sites to its Apps suite of online services, including calendar, document and communication tools.
The company charges businesses $50 per user per year for its top-end suite of Google Apps, though most of the individual components are available free.
Microsoft would not disclose its SharePoint pricing.
Benjamin J. Romano: 206-464-2149 or firstname.lastname@example.org