Back in July, Microsoft revealed pricing models and partner compensation details for Microsoft Online Services, and it boasted that a growing number of companies were finding the beta program solid enough to sign on for when the products were released. Yesterday, Microsoft finally announced the availability of two of the services in the United States: Exchange Online and SharePoint Online. Redmond hopes that businesses see these subscription services as a complementary option to the non-cloud versions of Microsoft's solution for portals and collaboration (Sharepoint) and its solution for e-mail and calendaring (Exchange).
Stephen Elop, president of the Microsoft Business Division, spoke of the launch as if Microsoft had had a major breakthrough: "Customers are embracing Microsoft’s software and services strategy en masse because of the choice and flexibility it gives them. Today, we bring business-class communications and collaboration technologies to the cloud, and we are committed to delivering more capabilities in the months ahead. No one has done what we are doing at this scale, and I’m certain that our customers will continue to take on these solutions as our offerings grow." In reality, Microsoft has bided its time and watched as the market pointed to the cloud, and now the company is offering businesses something that they'll find it hard not to take a closer look at: cloud versions of products their business already relies on.
Microsoft also claimed again that a growing number of companies of all shapes and sizes are embracing Microsoft Online Services, including Exchange Online, SharePoint Online, and Office Communications Online. According to a press release, "In just the past year, Microsoft has sold more than a half million seats. "Since July 2008, more than 1,500 companies have enrolled in the Microsoft Partner Program for Microsoft Online Services, with 100 more joining every week."
These numbers aren't by any means shocking, at least when compared to software solutions Microsoft provides. Still, "the cloud" is a software delivery medium that many companies don't want to yet, and given that, half a million seats is quite good. Subscriptions mean businesses can offer their employees the latest version for a fraction of the normal upgrade cost, assuming that the work being done with these services doesn't require much heavy lifting (not all features in the software are present in the service). These cloud services, which are hosted on Microsoft's own computers, aren't replacements for their software counterparts, but they do appear to be filling a gap that was previously too expensive to fill.
Exchange Hosted Services is $1.75 per user per month; Sharepoint Online is $7.25 and Exchange Online goes for $10. Suites, which refer to combinations of cloud services, start at $15 per user per month. That price equates to $180 a year, and as we've said before, that is quite steep when compared to Google Apps, offered for $50 a year. Microsoft's argument is that you get what you pay for, and the software giant argues that its offering is much more advanced and robust than Google's. Microsoft also has the advantage of offering familiarity for the many businesses that already use its products.
Microsoft must be seeing its Software + Services strategy doing very well, as the company also announced plans for an expansion of Microsoft Online Services in the next year. A Microsoft Online Services solution "that will provide IT management and security capabilities for businesses, enabling IT managers to secure and manage desktops using a Web-based subscription service" is on the way, along with the previously announced Office Communications Online. That's the business side of things, while the consumer pipeline has Microsoft Equipt and Office Web.
Resource - Ars Technica
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