Quietly But Surely, Microsoft Mimics The Salesforce.com Way - InformationWeek

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Quietly But Surely, Microsoft Mimics The Salesforce.com Way

Exchange and SharePoint are available as hosted services, with more on the way.

Microsoft is expanding into the hosted software market--the forte of Salesforce.com and RightNow Technologies--and it's doing so without all the usual fanfare.

At last week's TechEd conference in Orlando, Fla., Microsoft officials revealed that large customers can now get Microsoft-hosted versions of Exchange, SharePoint, and Office Communications Server, but there were no formal announcements. They also hinted that the company could begin offering hosted versions of its desktop management, business intelligence, and security products. "You could see all of the products that we sell as having an option of buying as a service in the future," says Ron Markezich, VP of Microsoft Managed Services.

Markezich: Everything is possible

Markezich: Everything is possible
For now, Microsoft is aiming its hosted applications at companies with 5,000 or more employees. It's not yet ready to offer hosted apps to small and midsize companies, though that could come later. "We're not going there yet," Markezich says.

Customers must license the software as part of any hosting deal, and there are monthly fees involved, although Microsoft hasn't published standard pricing. So far, four companies have signed up.

Battery maker Energizer Holdings is one of them, with 9,000 users accessing Microsoft-hosted Exchange, SharePoint, and Office Communications Server. Microsoft also is remotely deploying Office 2007 to Energizer's PCs.

The cost is about the same, but Energizer expects to boost productivity because employees will be using up-to-date apps, says CIO Randy Benz. Before a pilot with Microsoft started almost three years ago, Energizer was two releases behind on Office. It's now deploying Office 2007 and will begin rolling out Windows Vista in six months.

Letting Microsoft manage the applications frees Energizer's IT department to do more important work. "When you're managing the technical things, that consumes you," Benz says. "We're moving away from worrying about that and toward developing a better user experience."


Don't be surprised if Microsoft offers managed security next, including its Forefront security products. Antivirus services are part of Exchange Hosted Services, introduced last year as a way of adding security and backup in support of on-premises Exchange servers.

Microsoft is tinkering with hosted business intelligence software, too. At least one customer is testing Microsoft-hosted PerformancePoint Server 2007, the company's upcoming business analytics software, says Francois Ajenstat, director of SQL Server marketing.

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Microsoft will offer CRM Live, a hosted service for smaller companies, later this year. Company officials have hinted they might eventually offer Microsoft's Dynamics ERP software in similar fashion. Last week, Microsoft began testing BizTalk Services, hosted software for identity management, and announced a new version of its Live Meeting hosted Web conferencing service.

Microsoft's growing interest in the market poses a potential threat to companies already hosting its software, but Larry Strange, president of SharePointHosting.com, doesn't expect Microsoft to move downstream into the SMB market. "As far as we're concerned, it's not going to hit our radar," he says. Other companies offering hosted versions of Exchange or SharePoint include AppRiver, Ceryx, Computer Sciences Corp., EDS, Hewlett-Packard, IBM, and LightEdge Solutions.

Microsoft will help partners by sharing architectural guidance and deployment tools, says SharePoint VP Jeff Teper. He adds that there also will be new opportunities for partners to help customers integrate Microsoft-hosted apps with those they manage internally.

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