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November 17, 2008

Microsoft unleashes Exchange Online and SharePoint Online

Posted by David Hunter at 1:32 PM ET.

As promised back in July, Microsoft today took Exchange Online and SharePoint Online out of beta:

Today, at a launch event in San Francisco, Stephen Elop, president of the Microsoft Business Division at Microsoft Corp., was joined by customers and partners to announce the availability of Microsoft Exchange Online and Microsoft SharePoint Online for businesses of all sizes in the United States. These subscription services offer businesses a new way to purchase, deploy and manage the industry-leading e-mail and calendaring solution, and the industry-leading solution for portals and collaboration.

Businesses can buy or try the new services at As part of the Microsoft Online Services product family, Exchange Online and SharePoint Online are available separately or as a suite together with Office Live Meeting for conferencing, Microsoft Exchange Hosted Services and Microsoft Office Communications Online for instant messaging and presence.

A growing number of companies, from small businesses to large enterprises, are adopting Microsoft Online Services. In just the past year, Microsoft has sold more than a half million seats for Microsoft Online Services, including Exchange Online, SharePoint Online and Office Communications Online. New customers include Pitney Bowes Inc.; CG Healthcare Solutions LLC, an affiliate of Cowan, Gunteski & Co., P.A.; Clean Power Research LLC; Corefino Inc.; and Fair Isaac Corp.

In case it is not clear, these Microsoft Online Services offerings are merely managed hosting (aka remote outsourcing) by Microsoft of Exchange and SharePoint. They allow enterprises to run full fledged Microsoft server software without the expense of a full IT department complete with hardware. There’s nothing the matter with that and it is likely good business for all concerned except the Microsoft partners who used to provide similar managed hosting before the 800 pound gorilla entered the market. The partners do get the table scraps however:

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 companies are realizing a wide range of revenue opportunity that spans reselling, migration, customization, consulting, training, support and application development, and integration services.

However, one downside for Microsoft is that the managed hosting business tends to be high in capital outlay and low on margins unlike Microsoft’s core software business. Apparently they are proudly undeterred:

Microsoft also outlined its plans to offer new solutions as a part of Microsoft Online Services in the next year. In addition to Office Communications Online, Microsoft is planning to offer 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. These online services will be based on components from existing systems management, identity and security offerings, and will complement Microsoft’s on-premise solutions, as customers begin to adopt cloud-based computing to address specific needs.

Despite the "c" word in the above nebulous description this future vision sounds like more managed hosting and not cloud computing.

Filed under Hosted Services, Microsoft, Microsoft Online Services, Partner Program

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