Microsoft unleashes Web initiative with four net-based software products

Microsoft's desperate gamble for Yahoo has unveiled the next target of its growth – the internet. After dominating the personal computer world, the giant from Redmond wants to extend its considerable influence to cyberspace as well.

Consequently, in a change from its traditional method of selling programs that run on individual desktops or corporate servers, Microsoft is offering more Internet-based software.

Details were unveiled yesterday in Houston, Texas, at the Microsoft Worldwide Partner Conference. The company said that it will sell a package of four server products - Exchange Online, SharePoint Online, Communications Online and Live Meeting - to US companies by the end of the year for a fixed charge per month, and to global businesses in the first half of 2009.

For $15 per month per person, the business productivity suite offers an 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.

The software giant will charge another $3 per month per user for the Deskless Worker Suite, which combines flavors of SharePoint Online and Exchange Online. The SharePoint portal offers access to internal company sites and search. E-mail, calendars, security filters, and Outlook Web Access Light are included with Exchange Online Deskless Worker.

"Microsoft Online Services is a key component of the software plus services initiative, and we're seeing customers, partners and even competitors embrace this flexible approach to the cloud," Stephen Elop, president of Microsoft Business Division, said in a statement.

This move comes in the wake of similar moves unveiled by competitors like Google and IBM who are pushing online alternatives to Microsoft's installed programs, arguing that this approach is less expensive and more flexible.

Microsoft has stuck by its pronouncement that consumers and businesses will opt for a mix of remotely hosted programs and desktop or on-premise programs. In this case, Microsoft will still require companies to buy Outlook and other desktop programs powered by the remote servers.

As an incentive, Microsoft also told partners Tuesday it would give them a cut of contracts for online services, totaling 18 per cent the first year and 6 per cent each year thereafter.

Microsoft partners and resellers of Online Services include Accenture, CDW, and Unisys. Nokia is among the companies using the online tools for messaging and collaboration.

"We wanted to make sure partners were really encouraged to transform their business, too, as the world moves toward software plus service model," said Chris Capossela, a senior vice president in Microsoft's information worker software group.