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Microsoft Launches MOSS into the Clouds

This SharePoint as a service thing has been in the works. Previously we had a chance to talk with Tom Rizzo, Redmond’s Director of Microsoft Office SharePoint Server, just after the official announcement at the SharePoint Conference 2008 about the why fores and the hows.

Now we’ve got the scoop on pricing, including how Microsoft’s partners are getting compensated for potentially loosing integration business. The short story is that Redmond is walking through the doors of change, but doing its best to keep the channel in the loop and incented to generate business.

Dubbed the Microsoft Online Services (MOS) — not to be confused with Microsoft Office SharePoint Server (MOSS) — the company is taking a few of its solutions online including: SharePoint, Exchange, Office Communications, Office Live Meeting and Dynamics CRM.

Stephen Elop, president of the Microsoft Business Division says, “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.”

Yes, The Cloud is quite the concept these days. And we daresay that Redmond is arriving late to the game, a game that the likes of Google and Amazon have been embracing and playing with much vigor and success.

Two Categories of MOS Services

In Microsoft’s cloud there are two types of services:

Deskless Worker Suite

The Deskless Worker Suite is a light version consisting of Exchange Online Deskless Worker and SharePoint Online Deskless Worker.

• Exchange Online Deskless Worker: Email, calendar, address lists, anti-virus and anti-spam filters and Outlook Web Access Light
• SharePoint Online Deskless Worker: Access to portal and team sites and search

The cost? A per seat or subscription license of US$ 3 per user, per month. Or you can subscribe to each service separately.

For Information Workers - Online Business Productivity Suite

They didn’t give this one a fancy name, but it’s packed with functionality, including:

• Exchange Online: Desktop and mobile e-mail and calendars with Outlook Web Access and full Office Outlook integration
• Office SharePoint Online: Portals, collaboration, search and customized team sites
• Office Communications Online: Instant messaging and presence
• Office Live Meeting: Web conferencing and videoconferencing
  
  This version will run an organization US$ 15 per user, per month. You can, again, also subscribe to each service separately.

Channel Conflict and Partner Compensation

“Microsoft’s compromise is to offer services cheap, while compensating partners. It’s a risky move, because channel conflict is inevitable. Microsoft can coat this bitter pill in sugar, but the taste lingers: The company is directly competing with its partners.” eWeek’s Joe Wilcox

Microsoft has recognized that they need to keep their partners happy. These services will likely cause some partners to loose business as some offer similar services. How will they do it? Two ways:

• Partners will receive a share of the revenue stream for bringing clients into the the MOS. Partners will receive 12% of the first-year contract price and 6% of the ongoing subscription fee. That’s not bad.
• Microsoft has also noted that partners can make even more money through helping their clients migrate, combine and customize these services.

How Will the Competition Take the News?

According to eWeek’s Michael Hickins, “The likes of Salesforce.com, Netsuite and Workday will likely feign indifference; they’ll say Microsoft doesn’t get multi-tenancy, hasn’t built its applications for the Web, and is years behind the curve. But the truth is that if they aren’t shaking in their boots, they ought to be.”

If you look at the numbers, it will cost US$ 180 per user, per year for the MOS Information Worker Subscription and only US$ 50 per user, per year for the Google Apps subscription. So Google is still cheaper, but is the functionality equal? Does it need to be?

Google’s desire to get into the enterprise has seen them partner with Salesforce, but even they have competition from the likes of Zoho.

This move by Microsoft just demonstrates that they are trying to keep up with the times as best they can. They don’t have the business model that will let them compete with Google or Zoho on price, but they definitely have the ability to compete on functionality. And for the enterprise prize, both are critical factors.

The Microsoft Online Services are still in Beta but are open to all US citizens. Go dig around in their site and see if you think Redmond’s cloud has got what it takes.