Microsoft chops price of its hosted software

Microsoft said Monday that it's cutting by a third the subscription prices for the hosted versions of Exchange, Sharepoint, and Office Communications Server.

The software maker plans to cut the monthly per-user cost of licensing all three products from $15 to $10, while the cost of licensing individual products is also dropping by as much as 50 percent. The move comes as Microsoft faces continued pressure from rivals, including Google.

Capossela

(Credit: Microsoft)

Last week, the city of Los Angeles voted to go ahead with a deal to shift many employees to Google Apps from Microsoft Office.

In an interview, Microsoft Vice President Chris Capossela said the move has less to do with competitive pressure than that "it's the price that customers are really excited to buy our suite at."

,p> "We're pretty excited about the price and not so much focused on free services or the price Google or others might charge," Capossela said.

In addition to the price drop, Microsoft is also touting several new customers and announced its plan to bring the year-old Microsoft Online services to more than a dozen new countries.

The company is announcing its commercial launch in Singapore, as well as trials in Brazil, Chile, Colombia, Czech Republic, Greece, Hong Kong, Hungary, Israel, Malaysia, Mexico, Puerto Rico, Poland, Romania, and Taiwan. Microsoft also expects to have commercial availability in India later this year.

Among the new customers are McDonalds, Aon, Lions Gate Entertainment, and Rexel Group. They join existing customers, such as Blockbuster, Coca-Cola and Autodesk as those paying Microsoft to run hosted versions of its products. Microsoft formally launched Microsoft Online at a San Francisco event a year ago.

Next week, Microsoft will also formally launch Exchange 2010 at its TechEd Berlin developer event. Microsoft said last month that it had finalized the product. Traditionally, Microsoft has developed products first as a server and only later, if at all, customized them to run in hosted form.

Exchange 2010, though, was designed first as an online service and then crafted into a product that businesses can run on their own servers.

[Mr. Dee]

I don't believe that for a minute that Microsoft is not some how concerned about Google. But, I think it should either attract more customers or traditional on premise customers to stick with Microsoft's product line up. Google is obviously competitor especially where mail and calendar concerned.

[Random_Walk]

Yep - Google is competing - and obviously winning, hence the price drop.

The funny part is, Microsoft has competitors for their own product as well, in packages where folks can do hosted Exchange + SharePoint for a per-user price of as low as $4.95.

Now - which price is better for the same product if you're dealing with 100 users with basic needs - $1k/mo. or $495/mo. ?

[dhavleak]

Who are the guys doing hosted exchange + sharepoint for $4.95?

[Random_Walk]

http://www.google.com/search?q=hosted+exchange+and+sharepoint+%244.95

[Orion Blastar]

This is stupid, these MS online services cost $10/month per user and the Google services that do the same thing are free to use.

Google Wave does the same as MS Sharepoint.
Gmail does the same as Exchange Server.
Google Docs does the same as Live Office.


Soon I am guessing that Google will have a virtual machine option to compete with VirtualPC and run hosted ChromeOS in a virtual machine, online for free, while Microsoft charges money for hosted versions of MS Windows.

[NewsReader_]

Get a clue!!! The MS offering is more than a frickin online mail, a spreadsheet, and word processor.

"Gmail does the same as Exchange Server." Are you crazy??? Do you smoke crack??? I would have believed you if you said Hotmail. GMail is to Exchange as Notpad is to Word.

Google has NOTHING that even smells like Office Communications Server; NOTHING, NADA, ZILCH.

The closest thing they come close to is Sharepoint and that is reallllllllyyyyy stretching it.

$10 a month for those services is a steal. Take a moment to compare the product offerings before you start your FUD attack.

[Random_Walk]

Actually, for what most people need, GMail works just fine. After all, who uses public folders anymore these days? ;)

Incidentally, when you get down to it SharePoint is nothing more than a glorified (and expensive) CMS with some document controls tacked on. Sourceforge is full of server apps costing $0.00 that can do the same things and more, minus the proprietary MS Office filters (which are not really necessary, truth be told).

"$10 a month for those services is a steal."

Google around a bit - there are third parties that can do the same thing for half the price, with the same exact server apps (Exchange and SharePoint)

[NewsReader_]

I do not have time to educate you on the complete feature set of Exchange Server and SharePoint Server. Suffice to say that Google's offering is not in the same league. They are for mom and pop. The big boys go to Microsoft because they have products that scale to corporate level needs.

But just for grins, go find a Google equivalent of these things:
- Global address books
- Integrated security, security groups, remote management.
- customizable SPAM filtering
- CSS compliant web authoring
- support for .Net web parts
- ActiveSync support
- web presence
- IP phone integration

Happy hunting. Dress warm though because you will be out for awhile.

[dhavleak]

@ Random Walk -- you are sooo full of BS it isn't even funny.

Look here:
http://www.google.com/apps/intl/en/business/index.html

Google themselves don't claim that vanilla Gmail does the same as Exchange Server. Google themselves charge $50 / per user -- and they have a *business* version of the apps you listed -- because the consumer versions don't even come close to MS's productivity apps.

You can't even bother to do a simple search before spewing nonsense??? (And same goes for Orion Blaster).

[dhavleak]

@ Random Walk -- you are sooo full of BS it isn't even funny.

Look here:
http://www.google.com/apps/intl/en/business/index.html

Google themselves don't claim that vanilla Gmail does the same as Exchange Server. Google themselves charge $50 / per user -- and they have a *business* version of the apps you listed -- because the consumer versions don't even come close to MS's productivity apps.

You can't even bother to do a simple search before spewing nonsense??? (And same goes for Orion Blaster).

[lazycat202]

i'm empathizing for you; Random_walk.
nice try though!

[Random_Walk]

*ahem*: http://www.google.com/search?q=hosted+exchange+and+sharepoint+%244.95

I cannot believe it's this easy...

[Gold_Storm_Mac]

microsoft charges high prices with all the licensing required to use such services. linux and os x offer similar services for free thus bringing down the TCO compared to win server. they better do this to compete.

[Seaspray0]

No, they don't. They are cheap immitations. That licensing fee is easily made up by increased worker productivity over your free alternatives.

[Gold_Storm_Mac]

that's why "similar" was used. win's offering are greater but for many businesses the basics will do. neither open or closed source is the right way of doing things. both have their advantages.

[tekwiz4u]

I personally would NEVER pay for a subscription service. I would pay for the product outright (i.e - Exchange server), the client licenses and that's it. Getting tired of these companies (not google, but Microsoft) nickel and dimeing everything. You got your money, so stop the bleeding.

[Random_Walk]

Depends - it's cheaper for a small biz (say, less than 25 employees) to rent the mail stuff than to pay a full-time admin.

[Seaspray0]

@Random Walk. You're absolutely right. Even among companies, there is no one perfect solution for all of them. The subscription services do have a place.

[lazycat202]

it's time to consider to hire Apple to do admin duties. :P

[chabig83]

So customers wouldn't be really excited to pay $5 per month?

[rizarsurf]

Most employees do not need the full version of Outlook or any other Office software. They don't know how to fully use it. They "only check email". Google Apps is just fine for those folks, who are the majority.

I work for a very large Fortune 500 company and it would sicken you how much the great, great majority of office users do not know about the software. MS Office is overkill for them. They only know what they need to do their basic job and no more. Google Apps is way more than they need. Really.

[lazycat202]

i wouldn't bring all of my company files to Google.

[Splashes]

Microsoft? Microsoft? Uh . . .

Oh wait, that's right, I've heard of them. Just slipped my mind for a moment.

[maxgladius]

I will agree with dhavleak. @ Random Walk -- Gmail has only about 10% of features that are available in Exchange. And by the way, companies use public folders. And guess what, you can't share contacts in Gmail. Thats feature alone has turned many customers to Microsoft. I can go on and on with features that Gmail is missing. How about denying access to employee from home, or to a mailbox during specific hours, or having multiple aliases, or different reply to addresses, or monitoring employees, or answering on behalf......... I'm just starting. So really, before you talk why don't you pickup a book and lear what Exchange can do firts.

Before hating something try to test drive it firts, open a book or look at the demo. And to Linux dude, Linux is just like a Gmail, its missing features, support, updated drives.

[chet_cnet]

The article doesn't even mention Live Meeting. Given the current economic conditions, it saves a ton on money in travel, enabling businesses to collaborate remotely in real time. Some of the competitors charge $40/month just for that.

[weegg]

Hmmm, a lot of the services can be had for free through Eclipse and its supporters. Requires setting up (upfront costs - but dynamically expandable and patchable - which MS services are not). This is the new RCP environment that is increasing its presence in the corporate world.

[lazycat202]

$5/month is cheap and great services.

[Robin Majumdar]

Just as a side note, the reduced price $10 per month deal for the Business Productivity Online Standard Suite requires a minimum purchase of 5 "seats" (i.e. 5 licenses)...

That said, for getting access to Exchange Online, SharePoint Online, Office Live Meeting, and Office Communications Online it's a pretty compelling value proposition.