Microsoft Releases SharePoint, Exchange As A Service

Microsoft pushed further into the software-as-a-service market on Monday by releasing multitenant versions of Exchange Online and SharePoint Online available to anyone to complement dedicated tenant versions already for sale exclusively to large companies.

The availability of Exchange Online and SharePoint Online to companies of all sizes represents a big step for a company that until recently had been often criticized as being late to the SaaS party, as Exchange and SharePoint are two of Microsoft's more popular on-premises applications. Microsoft has predicted that within five years, half of all Exchange mailboxes will be delivered as a service.

Customers will be able to sign up at microsoft.com/online. They can buy Exchange Online and SharePoint Online separately or as part of a suite with Office Live Meeting for conferencing, Exchange Hosted Services for added e-mail services like spam filtering, and Office Communications Online (once it's released). Microsoft expects customers will save 10% to 50% on infrastructure and staffing costs by moving to Microsoft Online Services.

Microsoft has sold more than 500,000 seats of Microsoft Online Services to large companies in the last year alone. Among the company's newly announced customers are consumer electronics giant Philips, the state of Colorado, Universal Music Group, mail management company Pitney Bowes, and retailer Eddie Bauer. More than 7,000 companies and organizations signed up to participate in the multitenant beta for Exchange Online and SharePoint Online.

The company is touting the ease of migration from on-premises software to software as a service. "On a Friday, 1,400 of Eddie Bauer’s associates went home as [IBM] Lotus Notes users, and on Monday they came to work as Outlook users with Microsoft Online Services," Rich Mozack, CIO at Eddie Bauer, said in a statement. About two-thirds of Exchange Online customers are switching from a competing product, most often Notes.

It's not always so simple, nor is the simplicity even so clear in this case. Eddie Bauer had been on a beta with Microsoft for months.

"I don't want to make it sound like someone signed onto the Web site, swiped a credit card, and went home," Chris Capossela, senior VP of Microsoft's information worker product management group, said in an interview.

Microsoft's services sometimes have a client component, like Outlook with Exchange Online, that companies will still have to manage on-premises. And Microsoft is also releasing new automated tools and guidance for companies looking to move more of their software to SaaS, including an assessment and planning toolkit, an infrastructure planning and design guide, and operations guidance. Within the next year, Microsoft will announce and offer a slate of new online services, including the release of a multitenant version of Office Communications Online, which will first be available as a beta next year and will provide instant messaging and presence as a service. The company also is planning to release a desktop infrastructure and security management service based partially on System Center asset management and some capabilities Microsoft has been testing with battery company Energizer.

Last month, the company announced that the next version of Office would include Office Web Apps, which would allow customers to access a light version of Office client applications like Word and Excel in a Web browser. Capossela said that some of the most interested companies in Office Web Apps are like those in the manufacturing business that may have lots of workers who wouldn't otherwise have access to Office -- so-called deskless workers.

Microsoft also has plans to expand its partnership program for Microsoft Online Services. More than 1,500 companies have signed up since Microsoft announced the partner program in July, and more than 100 are being added to the rolls weekly to do everything from reselling and migration support to training and application development. "Unlike some of our competitors, we're very focused on how we can help our partners grow their business," Capossela said, giving a slight dig at companies like Google.

On Monday, Microsoft announced the Partner Solutions Showcase Program and an award to recognize top partners, the first of which went to ThoughtBridge for building a job-posting and application-processing app for SharePoint Online. Still, there's a limited amount of work partners can do with SharePoint Online today. ThoughtBridge's application uses SharePoint Online to call Web services, rather than having the code directly integrated with SharePoint. That may change.

"We don't yet let you run custom code," Capossela said. "There are limitations today for the online infrastructure, but we'll be doing far more work on that in the next version."

Adopting SaaS applications is easy with some companies like Microsoft. Integrating them can drive up the cost and complexity SaaS is supposed to avoid. InformationWeek has published an independent analysis of the topic. Download the report here (registration required).