Coming From Microsoft: 'Hosted Everything' - InformationWeek

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10/26/2005
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Coming From Microsoft: 'Hosted Everything'

Within a year, Microsoft plans to offer hosted implementations of SharePoint as well as its CRM and ERP applications.

Microsoft wants to get into hosting--in big and small ways.

Within a year, the Redmond, Wash.-based company plans to offer hosted implementations of SharePoint as well as CRM and ERP applications, several sources said.

A handful of service partners now host Microsoft applications for customers; the difference is future customers could choose Microsoft or a partner to run the infrastructure.

Microsoft declined to comment on specific hosting plans. However, Microsoft Chairman Bill Gates hinted at the strategy in an interview with CRN last month.

"SharePoint today runs primarily on premises. We have some partners who are doing hosted SharePoint. We are looking at what our role is in helping people with SharePoint,” Gates said Microsoft’s Professional Developers Conference in Los Angeles. “So technologically, the server equals service thing year by year is making good progress."

SharePoint Portal Server and Windows SharePoint Services act as the linchpin for most of Microsoft's current and planned collaboration products and services. Microsoft's acquisition of Groove Networks last year brought the software giant the expertise it needed to bolster the security and reach of such collaboration beyond and between corporate firewalls. And Gates stressed in the interview that regardless of where the software runs--on premises or "in the cloud"--partners with domain expertise and other knowledge will be needed for implementation help.

However Microsoft proceeds, the company knows it must explore new software and service delivery modes. Microsoft faces rising competition from vendors like Salesforce.com and NetSuite on the CRM/ERP front, yet by moving ahead with hosting Microsoft also could end up taking on longtime partners that host Microsoft software. Microsoft officials have told partners that the company’s hosting offerings will be "revenue-neutral" to them. Presumably, that means partners would sell and even customize applications for customers that could run on Microsoft servers.

Next week in San Francisco, Gates and Ray Ozzie, one of Microsoft's CTOs, are slated to talk more about the company' software-as-a-service push. Ozzie, the former chairman of Groove Networks, has been charged with leading Microsoft’s charge in this area. This week at another San Francisco event, Ozzie said the company will rely on experience gleaned from its MSN online service.

Microsoft’s hosting push is expected to target the gamut of users--including small companies with five to 10 PCs and no dedicated IT staff--who may want to do things like share calendar items but not worry about how that is accomplished. A hosted SharePoint could become the basis for a variety of such services.

Outsourced e-mail for companies of all sizes also would be big. "How much competitive advantage does e-mail give any company? Wouldn't those internal IT resources be better deployed elsewhere?" said one Microsoft source, who asked not to be named. Microsoft has been investigating ways to ease e-mail deployments and migrations by internal IT departments and to make e-mail more easily supported outside the firewall.

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