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Microsoft Climbs Higher Into the Cloud

By Erika Morphy
Jul 8, 2008 3:56 PM PT

Microsoft is offering some of its most popular acquisitions via cloud computing with the rollout of Microsoft Online Services. Like many vendors adopting this delivery mode, Microsoft is seeking to exploit companies' eagerness to downsize their internal IT and computing infrastructures to the greatest extent possible.

Microsoft Climbs Higher Into the Cloud

The applications Microsoft is hosting and selling through its partners include Microsoft Exchange Online, Microsoft Office SharePoint Online, Microsoft Office Communications Online, Microsoft Office Live Meeting, and Microsoft Dynamics CRM Online.

$15 Per Month, Per User

For US$15 per month per person, users can access Outlook-integrated Exchange Online for e-mail and calendars, Office SharePoint Online collaboration, messaging via Office Communications Online, and Office Live Meeting video-enabled Web conferencing.

For $3 per user per month, the Exchange Online Deskless Worker and SharePoint Online Deskless Worker give users access to e-mail, calendar, address book, company e-mail access and security features through Outlook Web Access Light. The SharePoint subscription gives access to SharePoint portal and team sites and search features.

Too Late?

Of course, Microsoft is not the first vendor to hitch its fortunes to the concept of cloud computing. From Amazon to Google to smaller best-of-breed point solution providers, the space is rapidly becoming crowded with offerings. Indeed, Merrill Lynch recently predicted the cloud computing market will reach $160 billion by 2011.

The role that Microsoft will ultimately play in this complex and continually changing landscape is anyone's bet -- although it will surely be a major provider.

Microsoft's initiative is very relevant and interesting, given the times, said Aaron Levie, CEO of Box.net, which competes with some of Microsoft's cloud offerings. Box.net is a Web-based file system that offers online file storage and sharing tools and a collaboration platform.

Microsoft is a little late to the party, though, Levie told the E-Commerce Times, following in Google's wake.

"But they haven't lost too much market share, and this is still a good time for them to be coming in," he allowed. "Many companies are only now starting to realize the potential and power of cloud computing."

Indeed, right now the market is still amorphous enough to support not only a number of large vendors such as IBM, Cisco, Amazon and Google, but also smaller best-of-breed providers, Levie continued.

"This is not just about Microsoft versus Google," he said. "It is becoming very apparent companies are rushing in to offer services [in the cloud] that Microsoft used to control."

Areas that have traditionally required huge computing resources are, not surprisingly, attracting vendor interest, Shane Aubel, partner in Accent Global System Architects, an IT consulting firm, told the E-Commerce Times.

BPM (business process management) vendor Appian is just one example, he said.

Adoption Issues

Getting as much of the channel as possible on board -- particularly developers -- will be key to any one vendor grabbing and maintaining market share, Aubel continued.

"Microsoft is trying to do that with its Software as a Service product line, but via the cloud -- getting developers engaged in developing and customizing that system," he said.

Barriers that are hindering commercial adoption pose another challenge, noted Aubel. From the consumer perspective, the offerings -- such as Google's -- are easy to understand, which is why there is a great deal of competition in that particular niche.

Implementing more advanced applications via the cloud becomes more difficult, though, depending on the organization's size, he continued, "but we are still seeing more promotion of these services than actual adoption."


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