Microsoft happy with more clouds in its future

In its drive to offer a more varied slate of services to its business customers, Microsoft Corp. this morning unveiled a series of four online software services which the company says will offer business a greater choice of technology while cutting information-technology costs. Like many other major software makers, Microsoft is moving its business customers into “the cloud,” so called because engineers like to draw a cloud to represent the Internet. The process of renting software, or software as a service, is called “cloud computing.” The four elements of the Business Productivity Online Suite are Exchange Online, a web-based mail server; Sharepoint Online, a collaboration and content management server; Office Live Meeting, a face-to-face meeting system over the Web with a whiteboarding system; and Office Communication Online, an instant-messaging service with file-transfer capability for all people within an organization. All the services will be accessible using only a browser and signing into an account. The only software being offered for optional installation on the business computer is a small dashboard-like program that centralizes all the four software services. In outlining the package, Microsoft Canada’s Unified Communications and Collaboration product manager Bryan Rusche said the pricing of the online package is flexible, depending on the size of the enterprise, but is about $20 per person per month. The offering, Microsoft Canada president Phil Sorgen said, is designed to ease the corporation as it upgrades its technology in a time of economic restraint. “The economic times have provided us with the greatest opportunity to offer this new technology,” he told a round-table meeting introducing the suite. “We’re expecting this [situation] to affect us for many years to come,” he added. He said that Microsoft is actively working with its partner corporations to continue to develop more software and services. One of the services being developed is the choice of where data is to be stored. Although the main data-storage places are in the United States and Ireland, the company is already offering its Canadian customers the choice of whether to store their data in Canada or elsewhere. The issue has become important over the past few years because if Canadian data is stored in the United States, for instance, it would not be governed by Canada’s more stringent privacy laws. Some Canadian corporations, especially publicly owned and government offices, are wary of storing their data in the United States, which has arrogated unto itself the right to inspect just about any online data in the name of security. Asked whether he expects any resistance to the new office suites, Mr. Sorgen said that Microsoft’s biggest problem is the notion that companies will have to change their entire approach to their IT needs and strategies. But, he added, that should be offset by assurance that the service is from Microsoft, and the corporations will know to trust the products. He said the company is also offering compensation packages to existing Microsoft corporate customers that wish to switch over to the new system. But he did allow that the technology of cloud computing is “still in the early stages,” and that the whole thing is likely to take some time before it is universally embraced. There is only one fundamental difference between the current corporate network and computing in the cloud, said Mr. Rusche: “The network is bigger. Much bigger.” Mr. Rusche said that one of the more attractive features of the cloud-computing model is that companies fear a massive initial expenditure for hardware and software, but the online system allows them to see the rental fees as “a predictable cost” without a major investment in new equipment and training. One point that Microsoft danced around without directly spelling out is that the cloud-computing model will become more attractive as the economy worsens and companies look to cut more costs, such as their expenditures in IT. The implication was that online services will allow companies to trim their IT staffs while passing the burden of managing the technology to Microsoft. Mr. Rusche cited a study, which found that while almost three-quarters of the companies surveyed rely on technology to remain competitive, only a small number of them expect to be able to increase their IT costs, preferring instead to cut the IT budgets back. Full disclosure: Jack Kapica is a consultant to Microsoft for consumer products and services.