ANTenna Blog -- Services

Late to the party would be an apt description of Microsoft’s launch of its new hosted business products software service. However, that does not mean that anyone can take the company’s entry lightly. The Behemoth tried to make a big impression by claiming to have already secured millions of customers and to differentiate itself by offering a wide variety of service options.

Microsoft has used its dominant position in the PC operating system area to put a stranglehold on the business software market. The advent of the Internet and the Software as a Service (SaaS) model tempted competitors, such as Cisco and Google, to try and loosen that grip.

Perhaps to protect its core business, Microsoft had resisted that model until now. The first two services in the Microsoft Online Services product family are Exchange Online and SharePoint Online. They are available separately or can be packaged with Office Live Meeting for conferencing, Microsoft Exchange Hosted Services and Microsoft Office Communications Online for instant messaging and presence. Pricing for the services ranges from $2.50 to $10 per use per month, and small and medium businesses can either use the SaaS service exclusively or mix and match it with traditional deployments. So, a firm’s IT staff could run Exchange at its home office but have the company’s teleworkers access information via the SaaS service.

Microsoft’s first two main applications were not selected haphazardly. Because Internet based collaboration applications are emerging, companies may be willing to use someone other than Microsoft to supply them. This is the area that Cisco and Google zeroed in on and therefore the one where Microsoft has to make its own mark. The vendor claimed to have sold more than a half million seats for its Microsoft Online Services since its beta program was announced six month ago, so, it sounds like the company is off to an impressive start.

Time will tell how much of a threat Cisco and Google represent. Through the years, Microsoft has been able to answer competitors’ challenges, and these two suppliers have no proven track record in delivering software. In fact, it appears that Google has struggled to get Google Apps off and running. What is clear is that with Microsoft’s entry small and medium businesses now have more options when selecting their business software.