The announcement came at the 2008 SharePoint Conference where Bill Gates described the changes in his keynote speech (see a live webcast here). A beta test version of Exchange Online, SharePoint Online, and Office Communications Server Online is now available.
Rather than being locked in to long term agreements for Microsoft software, companies can rent space on a server for a monthly fee. Another announcement – Microsoft Search Server 2008 can be downloaded free. It lets businesses search their internal files and competes with Google’s Search Appliance.
The increased flexibility and lower cost that Google and others offer, is changing Microsoft’s business model. Eventually all of Microsoft’s software will be more convenient and transparent.
“With Microsoft Online Services, businesses can deploy software as a subscription service, from servers they manage on-site, or a combination of the two, depending on their specific needs. In the future, customers and partners should expect to see this kind of choice and flexibility for all of Microsoft’s software and server products,” Gates said.
Intense competition between Google, Microsoft, Amazon Web Services, Salesforce, and others who cater to this market has changed the model. The winners are smaller businesses who will get more powerful software and services at a bargain price and on their terms.