The fact that many customers are shifting from running their own e-mail servers to getting mail as a hosted service doesn't have to spell doom for Microsoft, insists Rajesh Jha, the man who heads the Exchange business.
In an interview on Monday, Jha said that, although many see the rise of services as more of a benefit to companies like Google, he sees it as an opportunity for his business.
Microsoft's Rajesh Jha, shown here in his office earlier this year, says the shift from a world of servers to a world of services need not spell trouble for the Exchange business.
(Credit: Ina Fried/CNET)"I feel we will grow our share overall with the move to services," Jha said. In particular, Jha said that Microsoft has a better option for small and midsize businesses than it did when its only option was for those companies to run their own Exchange servers. "I think we have a huge opportunity for growth. I don't think we are in a defensive position at all."
In a year in which many software businesses--including a number within Microsoft--took a hit, the Exchange business continued to grow last year, Jha said, saying that revenue for the product nearly hit $2 billion and has 70 percent market share among corporate users.
Jha acknowledged, though, that competition for the in-box is definitely heating up.
"It is where people spend more of their hours," Jha said. "It's become a real critical part of the day. Our competitors are smart. They see it too."
In addition to Google, IBM continues to push its Lotus Domino/Notes combination while Cisco has said it will have a Linux-based e-mail offering based on last year's Postpath acquisition.
Sounding a familiar refrain, Jha said that he expects customers to warm to Microsoft's strategy, which lets them have the option of running Exchange themselves or purchasing it as a subscription hosted service.
"With Exchange, we don't give them any kind of technology ultimatum," Jha said. "We don't say 'Thou shalt move to the cloud.' "
Microsoft has shifted its priorities, though. Unlike past versions of Exchange, Microsoft developed Exchange 2010 as a service first, and only later has it done the work on the server product. That server product, which has been in testing for some time and reached the beta stage in April, is now ready in a near-final "release candidate" form.
Among its features is one that lets users "mute" an e-mail thread that they are no longer interested in being part of.
Jha reiterated that the final version of Exchange 2010 should be done later this year.
"I feel pretty good about how we are tracking," he said, noting that half of Microsoft's in-boxes--some 80,000--are now on the new version of Exchange. " We'll definitely be ready this year."
Exchange 2010's conversation threading feature, as seen in a screenshot of Outlook Web Access.
(Credit: Microsoft)The next version of Microsoft's corporate e-mail server will not only offer the ability to view e-mail by conversations, but also the option of "muting" any thread that a user would rather not take part in.
Conversation threading, a popular feature from Google's Gmail, and the mute option are several of the new features in Exchange 2010, the next version of the company's e-mail and calendar server. The software is entering public beta on Wednesday, with a final launch slated for the second half of this year.
Among the other features of the product, which has been code-named Exchange 14, is something Microsoft has dubbed "MailTips," which offers warnings when one might be about to commit an e-mail faux pas.
"MailTips is kind of like a guardian angel before you send the mail," Microsoft's Rajesh Jha said in an interview this week. For example, it will warn a user if they are about to send an e-mail to a large distribution list or if they are going to send an attachment outside their company's firewall.
Microsoft is also building in new archiving features into Exchange 2010, features that will allow companies to store a user's e-mail archive as well as make archived messages available to users when they are not at their desktop or laptop PC.
Many of Exchange 14's features work in the Web-based Outlook Web Access program, but to use them on the desktop will require Office 2010, which isn't due out until the first half of next year, Microsoft said.
"Exchange is leading the way," Jha said.
Microsoft is already using Exchange 2010 to power its Live@edu service for schools and universities. Customers of Exchange Online, Microsoft's hosted service for businesses, will have the option of moving to the new Exchange after the server software is released, Jha said.
For a bit more on Exchange 2010, here's a video I shot with Jha during an interview at his office earlier this year.
Microsoft said this week that it will start widespread testing of the next version of the Office suite sometime in the third quarter, in preparation for a final launch of the product in the first half of next year.
The product, which has been code-named Office 14, will be dubbed Office 2010 (as I predicted), with all of its related components also getting the 2010 moniker.
Microsoft first talked about the browser-based abilities of Office 2010 (then code-named Office 14) at a developer conference last October. Click image for full gallery.
(Credit: Microsoft)Microsoft offered only limited details on the testing. In an interview, Office executive Rajesh Jha, who leads the Exchange team, said technology previews are more limited than public betas and typically go to hundreds of thousands more technical users as opposed to public betas, which go to millions of people and are something that "much more closely resembles a final release."
The schedule is not as ambitious as the one Microsoft laid out last October, which had called for a technology preview last year to be followed by a beta this year. Some very early testing of Office 14 did take place in 2008, but Microsoft confirmed earlier this year that the final version of Office 14 would not come until 2010.
Jha said that the technology preview will include both the traditional desktop versions of Word, Excel, PowerPoint, and OneNote as well as the browser-based "Office Web Apps" that Microsoft is building. The browser-based versions will be somewhat more limited than their desktop counterparts, but will include basic editing abilities, Microsoft has said. The software maker has also said the browser-based applications will run in Safari and Firefox, in addition to Internet Explorer, which will take Office onto both Linux computers and the iPhone.
"As you know, IT is being asked to do more with less and keep people more productive," Jha said. "With the next wave (of Office), we really wanted to address these challenges. Let's help people be more productive, whether it be from a PC, or a browser or a phone."
The roadmap for Office 2010 testing came as an aside within a Microsoft announcement that it will launch this week a public beta of Exchange 2010, the next version of its e-mail server. That product, part of the Office 14 wave of products, will ship this year, Microsoft said.
As noted earlier on Tuesday, Office 2010 will come in both 32-bit and 64-bit versions.
Microsoft VP Rajesh Jha likens building complex software to building a skyscraper. With Exchange 14, though, Microsoft is having customers set up their offices even while the building is under construction.
(Credit: Ina Fried/CNET)REDMOND, Wash.--Rajesh Jha likens complex software projects to building a skyscraper.
That means in the end, the thing might look pretty good. Along the way, though, it tends to be kind of a mess.
"If you walk by the site of a skyscraper under construction, it looks chaotic," Microsoft corporate VP Rajesh Jha said in an interview last week. "It looks confused. You will see dirt, scaffolding."
At the end, though, if it is useful, it will be something worth all the dust.
"If it is designed well, what comes out is something that adds a lot of value, something that folks use for a long time."
But, with the next version of Exchange, Microsoft is actually going to be letting people work from the skyscraper while it is being built. That's because, although the server version of Exchange 14 won't come out until next year, millions of people are already using a hosted service powered by an early version of Exchange 14.
The last version of Exchange, Exchange 2007, was also designed to be run as a hosted service in addition to something used by businesses on their own servers. The last time around, though, Microsoft built the server software first and then delivered the service.
In developing Exchange 14--and indeed many components of the next Office--Microsoft has flipped the switch and is instead developing the service first and doing the server work second.
"In many ways, this wave was about embracing software plus services from the very beginning," Jha said.
By doing the service first, Microsoft is able to create a large base of testers early on. At a comparable stage of Exchange 2007's development, there were a few thousand people running an early version. This time around, Microsoft has 4 million testers, in large part because Exchange 14 is now the engine behind the Exchange Labs service that powers e-mail for many universities and other educational institutions.
That has meant a lot of changes to Redmond's skyscraper construction operation. "The way we do production and testing has really changed in a dramatic way," Jha said. "The release time frame has become so compressed."
In a sense, Exchange 14 isn't really a new piece of software as it is a bunch of updates to the Exchange Online service. "Then we collapse them and build a server," Jha said.
Keeping things neat and tidy amid chaos comes somewhat naturally to Jha, whose office is nearly immaculate, with only a few books, a couple of old boxed copies of Microsoft Works, and the "Ship-it" plaque that commemorates all of the products he has helped get out the door. Jha explains that he moves frequently and his goal was to get his office contents such that they take only one box to pack. (He narrowly missed that goal in his last office shuffle three months ago.)
"I'm moving again next month," Jha said.
For more from Jha, check out the video interview I shot last week.
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