Microsoft to Expand Microsoft Online Services for Businesses of All Sizes
Exchange Online and SharePoint Online enter beta. — Monday from the annual Microsoft Office SharePoint Conference, Bill Gates, chairman of Microsoft Corp., will announce that the company will offer Microsoft Online Services to businesses of all sizes.
Context & Ripple Effects
Microsoft had been linked to a fully web-based Office concept in a 2005 report on a Web-based Office. The Exchange Online and SharePoint Online betas turn that direction into a business-facing test, while Microsoft still draws billions from desktop software.
The announcement also lands amid a confirmed positioning battle with Google, making hosted collaboration tools a strategic complement to Microsoft's established software business rather than a standalone product experiment.
First-order effects
- Businesses of all sizes can evaluate Exchange Online and SharePoint Online in beta, expanding Microsoft's direct engagement with customers seeking hosted collaboration tools.
- Microsoft must support its collaboration products as online services while maintaining the desktop software business that supplies substantial revenue.
Second-order effects
- Google faces a more explicit Microsoft challenge in business productivity and collaboration, as the two companies jockey for position in online services.
- Business buyers gain a new basis for comparing Microsoft’s hosted offerings with desktop deployments, shifting evaluations toward service delivery as well as product features.
Third-order effects
- If broad business adoption follows, collaboration software competition will increasingly center on operating hosted services rather than solely selling desktop licenses.
- Microsoft’s need to pair online delivery with its established software revenue points to a gradual transition in which vendors manage both service and license businesses.
The trend: Enterprise productivity software is beginning to move from desktop-led deployments toward hosted collaboration services, with Microsoft and Google competing for the business relationship.