Microsoft Gets Serious About Hosted Enterprise Software

Microsoft has revealed more of its software-plus-services plan to
better compete with online competitors, announcing new hosted services
targeted at enterprise customers and small businesses.

The company’s enterprise product roster is poised to get a makeover with its first hosted services for larger enterprises. Until now, Microsoft has primarily focused its online services initiative on consumers and small businesses.

Microsoft’s Online Services for Business are available to large businesses with 5,000 or more seats, and feature hosted versions of Exchange e-mail, SharePoint document management, and Office Communications.

“With the Online Services brand, we’ve begun jumping into the business
services game,” Richard McAniff, corporate vice president with Microsoft’s
Office team, told

Microsoft also rolled out a new offering for home and small business users, called Office Live Workspaces. It will enable users to store and share documents online, but not create or edit them.

Chief software architect Ray Ozzie, provided initial details of the company’s growing online services roadmap in late July at Microsoft’s annual financial analysts meeting. At that time, he said
that the company would soon begin delivering on what he terms a targeted “platform strategy.”

“Services is going to be a critical aspect of all of our offerings from Windows and Office on the client to Exchange and SharePoint and [the]
Dynamics [product family] and other things on the server,” Ozzie said then.

That vision differs from the purely software as a service strategy embraced by competitors, such as Microsoft is aiming to add value to its desktop software, instead of replacing it with a completely online offering.

That move, and the new product announcements in particular, are aimed at keeping Microsoft in the running with major competitors in the SaaS arena.

“It’s an indication that they’re not going to be left too far behind Google and others in the cloud-computing space, where they’re going to be a fast follower,” David Smith, an analyst at researcher Gartner, told

Microsoft arrived late to the services party, and the company needs to keep itself on customers’ radar, he added. “They need to be close enough to [Google and others] that customers don’t decide to go with Google instead.”

While Online Services for Business is a paid service, McAniff said Office Live Workspaces would be free. That offering is currently in beta and will go live later this year, he added.

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