By Reuters
InformationWeek
Last year, Microsoft started subscription-based online
services to run its Exchange corporate e-mail program and
SharePoint collaboration software on Microsoft's own computer
systems as an alternative to customers buying their own
hardware to run licensed software.
Microsoft initially limited those services to companies
with more than 5,000 workers, but the company said it will now
offer the service to businesses of all sizes in the second half
of 2008, after a testing period. The company did not disclose
how much it will charge customers for the services.
It will also begin to offer a free download of a software
called SearchServer 2008 Express that allows companies to
search files and documents inside their network. The product
will rival Google Inc's Search Appliance.
Microsoft plans to unveil the news during a speech
Monday by Chairman Bill Gates at a conference for SharePoint,
one of its fastest-growing applications, which allows workers
to share documents and plan projects on secure Web sites.
Hosted Web services are gaining popularity among business
customers, because companies do not need to spend a lot of
money upfront to buy and maintain powerful computer servers.
Instead, companies can rent space on a computer server from
a service provider for a monthly fee and avoid being locked
into multiyear corporate agreements that are used by Microsoft
for many of its core software offerings.
It also lets smaller companies get applications normally
reserved for large organizations.
"This is a market that is really starting to pick up. I
believe it is going to going to get very large," said Karen
Hobert, an analyst at Burton Group.
Google, Salesforce Inc and a host of start-ups
are aggressively targeting Microsoft's traditional business
customers with Web applications that can be less expensive and
easier to install on computers and run.
Last week, Google announced that it is offering a simple
Web site publishing tool for office workers to set up and run
their team collaboration sites.
Google Sites, as the new publishing service is known, is a
stripped-down version of SharePoint that is free to users of
Google Apps, a set of business applications that Google offers
at a fraction of the cost of Microsoft's comparable products.
SOFTWARE PLUS SERVICES
Some companies such as Salesforce see Web services
eventually replacing traditional packaged software, but
Microsoft is pushing a "software plus services" strategy with
the promise that this option combines the best of both worlds.
"Microsoft is starting to feel the pressures of the Googles
of this world," Hobert said.
Microsoft's rivals have begun making inroads into the
corporate market. Google says it has signed up more than
500,000 businesses over the past year to use Google Apps. One
appeal is the ease with which office workers can get started
and run their own team Web sites, without technical support.
But Microsoft said technology administrators in large
organizations are concerned about losing control over access
and usage of the software.
Redmond, Washington-based Microsoft said the products will
work the same as existing offerings, but the software will run
on Microsoft's computer servers. Administrators, according to
Microsoft, will maintain nearly the same level of control as if
the software was on their own computers, but have fewer
headaches managing related hardware, storage and software.
Microsoft has invested billions of dollars to build
enormous data centers packed with thousands of powerful
computer servers and storage systems to offer services to both
regular consumers and customers in large organizations.
In order not to jeopardize corporate agreements that
underpin many of its businesses, Microsoft said any company who
wants to switch over to its services will be credited for the
remaining portion of an existing contract, which can be applied
toward monthly subscriptions.
Customers such as Autodesk Inc, Blockbuster Inc
and Ingersoll-Rand have signed up for
Microsoft's services, according to the company.
(Additional reporting by Eric Auchard in San Francisco;
Editing by Maureen Bavdek)
By: Daisuke Wakabayashi
Copyright 2008 Reuters. See original article on InformationWeek
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