Microsoft's cloud forms

At the Worldwide Partner Conference in Houston, Microsoft made its biggest foray yet into cloud computing with pricing and partnership arrangements for Microsoft Online Services, a family that includes Online versions of Exchange, SharePoint, Office Communications, Office Live Meeting, and Dynamics CRM.

Microsoft's uniform pricing and low subscription rates stand out. Whether Microsoft or its partner/resellers make the sale, the cost per seat for all of the above applications (not including Dynamics CRM) bundled together runs just US$15 per seat per month. For browser-based versions of Exchange and SharePoint -- an offering that targets so-called "deskless" workers -- the price drops to a rock-bottom $3 per month per seat. In both cases, partner/resellers reap 12 percent of the first-year contract price plus 6 percent of the ongoing subscription fee.

According to Eron Kelly, Senior Director of Microsoft's Business Online Service Group, the new offerings "help customer deployment times shift from months to minutes." And for Microsoft partners, the pricing model "provides a way for them to participate in Microsoft's transformation to software plus services. They will be able to generate ongoing, recurring revenue streams."

The focus on Microsoft partners reveals a keen sensitivity to potential channel conflicts. Numerous partners already host Exchange and SharePoint for their customers and can continue to do so. In the new Online Business offering, however, Microsoft itself will also run multitenanted versions of Exchange, SharePoint, Office Communications, Office Live Meeting, and Dynamics CRM -- while enabling partners to customize, add value, and enjoy a slice of the revenue.

The value-adds apply mainly to Exchange and SharePoint. For example, said Kelly, partners could help customers set up Active Directory on premise and migrate an existing mail store to an instance of Exchange running on Microsoft servers. With SharePoint deployments, which typically involve significant customization, Microsoft will run the SharePoint core while partners help customers engage in such tasks as building templates that reflect their brand.

Kelly acknowledges that Microsoft's Online Services are not multitenanted across the board. If a customer needs a SharePoint template that runs custom code, for example, that template must run locally and call Microsoft's multitenanted instance of SharePoint via Web services APIs. SaaS (software-as-a-service) companies like Salesforce, by contrast, have offered full multitenanted applications with self-service customization for years. Kelly provided no firm date, but asserted that eventually all features of Microsoft Online Services will be multitented.

Microsoft rattled off a long list of beta customers for Microsoft Online Services at the announcement, including Eddie Bauer and Nokia. The fully cooked version at the quoted per-seat prices will be available to all this fall. And according to Kelly, Microsoft's Global Foundation Services Group will ensure the company has enough datacenter capacity to handle the new load.

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