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Microsoft Unveils New Services Suites, Pricing Details

The company additionally laid out plans to pay its partners 12% of first-year revenue and 6% of ongoing revenue from sales.

J. Nicholas Hoover

July 8, 2008

3 Min Read

Microsoft lowered the curtains a bit on its services strategy Tuesday at its annual Worldwide Partner Conference, laying out pricing, announcing two new suites of subscription services for collaboration and productivity and beginning to detail its partner strategy for services.

The company unveiled the Microsoft Online Services suite, which will include Microsoft-hosted versions of Exchange, SharePoint, and Office Communications Server as well as LiveMeeting and will cost $15 per user per year. That's 38% less than the $24.25 per month per user those services would cost separately.

Individually, Exchange Online will cost $10 per user per month, SharePoint Online $7.25 per user per month, Office Communications Online $2.50, and Office Live Meeting $4.50. Multi-tenant versions of those services are currently in beta testing and are expected to be released later this year.

Microsoft also unveiled a new "Deskless Worker" suite for online services, consisting of access to e-mail, calendaring, address books and SharePoint sites for employees who don't typically stay in one place or have access today, such as nurses, factory floor workers, and delivery drivers. It will cost $3 per month per users. Microsoft estimates it opens up a huge underserved market to it.

"For the price of a latte every month, we can have a factory floor worker engaged in an Office environment," former Juniper chief operating officer and Macromedia CEO Stephen Elop said.

Speaking in his first major public appearance since taking over as Microsoft business division president from outgoing Jeff Raikes, Elop hyped Microsoft's vision for software plus services in a keynote punctuated by his Canadian accent and some refreshing honesty about the long road Microsoft has yet to traverse. "We don't have it all figured out," he said. "It's new to us as well."

Elop said that though he was resistant at first to Microsoft's vision of software plus services as a backwards way of thinking, he's come around. Customers, he said, still want choice, because services won't fit for everyone everywhere. He even took a gentle swipe at Salesforce.com CEO Marc Benioff, saying that certain "self-proclaimed industry luminaries who proclaim software is dead" are wrong.

As Microsoft has rolled out its online services, its partners have expressed concerns that they would be left out of the equation. Since Microsoft is renowned for its strong partner ecosystem and gets 96% of its revenue through channel partners, any tweaks could represent a major shock to the system for partners and customers used to dealing with Microsoft through third parties.

On Tuesday, Microsoft laid out plans to pay its partners 12% of first-year revenue and 6% of ongoing revenue from sales, and said that eventually, everything partners can provide in the software world, they'll be able to provide in the services world as well. Among key roles for partners in the emerging services world include things like moving customers from Lotus Notes to Exchange Online, customizing SharePoint, and consulting around collaboration and messaging.

Microsoft also added to its slate of notable services customers that already includes Blockbuster, Energizer, and Coca-Cola, announcing that Nokia and Eddie Bauer are also jumping on board.

About the Author(s)

J. Nicholas Hoover

Senior Editor, InformationWeek Government

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